fcpa enforcement and anti-corruption developments7 closures of investigations were counted based on...
TRANSCRIPT
January 24, 2020
© 2020 Paul, Weiss, Rifkind, Wharton & Garrison LLP. In some jurisdictions, this publication may be considered attorney advertising.
Past representations are no guarantee of future outcomes.
FCPA Enforcement
and Anti-Corruption
Developments
2019 YEAR IN REVIEW
i
Table of Contents Introduction ......................................................................................................................................................... 1
Corporate Enforcement Overview ...................................................................................................................... 2
DOJ Corporate Enforcement .............................................................................................................................. 5
New DOJ Policies Affecting Corporate Enforcement .................................................................................... 6
Revisions to FCPA Corporate Enforcement Policy ........................................................................................ 6
Guidance for Evaluating Corporate Compliance Programs ........................................................................... 8
Guidance for “Inability-to-Pay” Claims .......................................................................................................... 9
China Initiative ............................................................................................................................................... 10
SEC Corporate Enforcement .............................................................................................................................. 11
SEC Whistleblower Program ......................................................................................................................... 12
New SEC Policy Affecting Corporate Enforcement ..................................................................................... 14
CFTC Developments .......................................................................................................................................... 14
Legislative Developments ................................................................................................................................. 16
Compliance Monitors ........................................................................................................................................ 17
Review of Select Corporate Resolutions ........................................................................................................... 18
MTS ................................................................................................................................................................ 18
Telefônica Brasil ............................................................................................................................................ 19
Walmart ......................................................................................................................................................... 20
TFMC .............................................................................................................................................................. 21
SHI .................................................................................................................................................................. 23
Enforcement Actions Against Individuals ....................................................................................................... 24
Legal Developments Affecting Enforcement Tools ......................................................................................... 27
In re: Sealed Case .......................................................................................................................................... 27
United States v. Hoskins ...............................................................................................................................28
Liu v. SEC ...................................................................................................................................................... 30
Multi-Jurisdictional Coordination ................................................................................................................... 31
Foreign Jurisdictions Investigating and Prosecuting Corruption .................................................................. 32
Africa ............................................................................................................................................................... 32
Asia .................................................................................................................................................................. 32
Europe and the Middle East .......................................................................................................................... 34
Latin America ................................................................................................................................................. 37
North America ................................................................................................................................................ 39
Oceania .......................................................................................................................................................... 40
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Multilateral Development Bank Sanctions ..................................................................................................... 40
Looking Forward Into 2020 .............................................................................................................................. 41
Introduction
The DOJ and the SEC assessed a record-breaking combined total of over $2.6 billion in corporate penalties
in FCPA cases in 2019, with foreign authorities assessing another nearly $215 million in penalties in those
cases. While many of the penalties closed out long-standing investigations that were begun prior to 2015,
the number of corporate FCPA enforcement actions resolved by the DOJ and the SEC remained comparable
with the number of resolutions in 2018, and clearly signaled the U.S. authorities’ commitment to continued,
vigorous enforcement of the FCPA.
Consistent with their stated emphasis on individual accountability, both the DOJ and the SEC were
unusually active in prosecuting individuals in 2019. Four individuals were convicted of FCPA charges
following three separate jury trials. This marks a significant increase in FCPA-related trials, with only three
FCPA cases going to trial in the previous six years. In addition, both the DOJ and the SEC announced
considerably more individual prosecutions than in 2018, returning to levels seen in 2017.
The DOJ also announced several policy changes intended to advance the Department’s stated desire to
increase transparency and consistency in the way that prosecutors enforce the FCPA. The policy revisions
additionally seek to lessen the burden and costs of corporate investigations, and to avoid outcomes that
disproportionately penalize innocent employees, stakeholders, and customers.
As in recent years, cooperation between the U.S. and foreign enforcement authorities remained a key
feature of FCPA enforcement, with the DOJ and the SEC acknowledging assistance from the governments
of over twenty countries in connection with U.S. corporate enforcement actions. Also continuing the trend
of recent years, the penalty amounts assessed by foreign authorities in connection with these actions
declined sharply. In addition, several foreign authorities brought aggressive prosecutions of high-level
officials within their own borders, and a number of foreign jurisdictions enhanced their anti-corruption
laws.
Our reflections on the year’s most significant developments in anti-corruption and FCPA enforcement and
policy are below.
2
Corporate Enforcement Overview
In 2019, the DOJ and the SEC resolved a combined 20 enforcement actions against business entities,
resulting in over $2.6 billion in fines, penalties, disgorgement, and pre-judgment interest, of which $1.6
billion was assessed by the DOJ and $1 billion by the SEC.1 The two largest settlements—Mobile
TeleSystems PJSC (“MTS”) and Telefonaktiebolaget LM Ericsson (“Ericsson”), each of which involved
investigations of a foreign telecommunications company that began as early as 20132—accounted for over
$1.9 billion of the total. The DOJ credited another $214.3 million in penalties assessed by foreign
authorities in foreign prosecutions associated with U.S. enforcement actions, a substantial decline
compared to recent years.
FCPA CORPORATE ENFORCEMENT ACTION PENALTIES 2015–2019
1 Penalty amounts account for offsets between the DOJ and the SEC, and between U.S. and foreign authorities. 2 Press Release, TELEFONAKTIEBOLAGET LM ERICSSON, Ericsson Estimates Costs for Resolving Investigations by U.S. Authorities
at SEK 12 b. and Makes Provision in Third Quarter (Sept. 25, 2019), https://www.ericsson.com/en/press-releases/2019/9/
ericsson-estimates-costs-for-resolving-investigations-by-u.s.-authorities-at-sek-12-b.-and-makes-provision-in-third-quarter;
Mobile TeleSystems OJSC, Ad Hoc Notice (Form 6-K) (Mar. 19, 2014), https://www.sec.gov/Archives/edgar/data/
1115837/000110465914020809/a14-8453_16k.htm.
3
The DOJ resolved seven and the SEC resolved 13 corporate enforcement actions in 2019.3 These totals are
generally consistent with recent years, aside from the highs of 2016.
FCPA CORPORATE ENFORCEMENT ACTION RESOLUTIONS 2015–2019
3 Enforcement actions were counted based on the year they were announced. See Related Enforcement Actions, U.S. DEP’T OF
JUSTICE, https://www.justice.gov/criminal-fraud/related-enforcement-actions; SEC Enforcement Actions: FCPA Cases, U.S.
SEC. & EXCH. COMM’N, https://www.sec.gov/spotlight/fcpa/fcpa-cases.shtml. Resolutions announced on the same day by the
same enforcement agency against corporate affiliates were counted as one resolution (e.g., TechnipFMC plc and Technip USA,
Inc.).
4
The DOJ and the SEC entered into corporate resolutions with companies across a variety of industries. U.S.
authorities were most active in the industrials and information technology sectors, though the two largest
settlements involved companies in the communications services sector.4
2019 FCPA CORPORATE ENFORCEMENT RESOLUTIONS BY INDUSTRY
4 Industries were defined according to the sector classifications set by S&P Global Market Intelligence, pursuant to the Global
Industry Classification Standard. See Companies, Assets and Profiles, S&P GLOBAL (2020), https://platform.mi.spglobal.com/
web/client?auth=inherit#dashboard; S&P GLOBAL, GLOBAL INDUSTRY CLASSIFICATION STANDARD (2018),
https://www.spglobal.com/marketintelligence/en/documents/112727-gics-mapbook_2018_v3_letter_
digitalspreads.pdf. Resolutions announced on the same day against corporate affiliates were counted as one resolution,
irrespective of the enforcement agency.
5
The map below demonstrates the global span of FCPA cases by showing the countries in which improper
conduct allegedly occurred, based upon the allegations in the 2019 corporate resolutions. China and Brazil
featured in the largest number of FCPA cases, at seven and six cases respectively.
2019 FCPA CORPORATE ENFORCEMENT ACTIONS BY LOCATION
DOJ Corporate Enforcement
In 2019, the DOJ announced seven corporate resolutions and assessed $1.6 billion in penalties. Nearly two-
thirds of the resolutions in 2019 involved foreign companies, which is an increase from 2018, when half of
the DOJ resolutions involved foreign companies.
The DOJ issued two public declination letters in 2019 pursuant to the FCPA Corporate Enforcement Policy.5
Both declination letters specified that the companies (Cognizant Technology Solutions Corp. and
Quad/Graphics Inc.) were required to disgorge all ill-gotten gains. This is consistent with prior public
5 See Letter from Craig Carpentino, U.S. Att’y for D.N.J., and Robert Zink, Acting Chief, U.S. Dep’t of Justice Crim. Div. Fraud
Sec. (Feb. 13, 2019), https://www.justice.gov/criminal-fraud/file/1132666/download; Letter from Matthew Kruger, U.S. Att’y
for E.D. Wisc., and Robert Zink (Sept. 19, 2019), https://www.justice.gov/criminal-fraud/file/1205341/download; see also
Client Memorandum, Paul, Weiss, Rifkind, Wharton & Garrison LLP, DOJ Issues New FCPA Corporate Enforcement Policy
(Nov. 30, 2017), https://www.paulweiss.com/practices/litigation/anti-corruption-fcpa/publications/doj-issues-new-fcpa-
corporate-enforcement-policy?id=25619.
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declination letters: Ten of the eleven prior letters issued pursuant to either the FCPA Corporate
Enforcement Policy or the 2016 FCPA Pilot Program, the predecessor to the FCPA Corporate Enforcement
Policy, had stated that the companies were required to disgorge ill-gotten gains to the DOJ or that the DOJ
had credited the company’s disgorgement of ill-gotten gains to the SEC as part of parallel settlements.6
Based on the companies’ public announcements, the DOJ also apparently closed its investigations, without
issuing public declination letters, into at least four companies that had been under investigation for
potential corruption offenses (OSI Systems, Inc., Misonix, Inc., EniSpA, and Royal Dutch Shell plc).7 The
bases for these decisions are not known, including whether there was conduct sufficient to support a
prosecution.
New DOJ Policies Affecting Corporate Enforcement
In 2019, the DOJ announced a number of policies affecting FCPA corporate enforcement, including
revisions to the DOJ’s existing policies regarding cooperation credit, guidance on how prosecutors should
evaluate the effectiveness of corporate compliance programs, guidance on how prosecutors should evaluate
claims that corporations are unable to pay a proposed fine or monetary penalty, and an enforcement policy
concerning Chinese entities. Although it is too early to evaluate the effect of these policies on FCPA
enforcement, the DOJ has stated that it intends for these new policies to increase transparency and to lessen
the severity and costs of corporate investigations. These policies also indicate the importance the DOJ
places on corporate compliance and incentivizing self-disclosure.
Revisions to FCPA Corporate Enforcement Policy
On March 8, 2019, Assistant Attorney General Brian A. Benczkowski announced revisions to the FCPA
Corporate Enforcement Policy to reflect how the original policy is applied in prosecutions.8 On November
20, the DOJ announced additional revisions to the policy to clarify the information companies need to
disclose, and when, to obtain the benefits of the policy.
In a speech announcing the DOJ’s efforts to bring its policies up to date, AAG Benczkowski remarked that
the policy had been revised to set forth updated, practical definitions, with the expectation that the revised
policy will “bring it in line with current practice” at the DOJ and “avoid[] chilling acquisition activity by law-
6 See Declinations, U.S. DEP’T OF JUSTICE (last updated Sept. 26, 2019), https://www.justice.gov/criminal-fraud/pilot-
program/declinations. 7 Closures of investigations were counted based on the year in which the U.S. authority appears to have closed the investigation,
irrespective of the year in which the company made its disclosure. 8 See Brian A. Benczkowski, Dep’t of Justice Assistant Attorney General, Remarks at the 33rd Annual ABA National Institute on
White Collar Crime Conference (Mar. 8, 2019) (hereinafter, “Benczkowski Remarks”), https://www.justice.gov/opa/speech/
assistant-attorney-general-brian-benczkowski-delivers-remarks-33rd-annual-aba-national; Dep’t of Justice, Justice Manual,
§ 9-47.120 (revised Nov. 2019) (hereinafter, “Justice Manual”), https://www.justice.gov/jm/jm-9-47000-foreign-corrupt-
practices-act-1977; see also Client Memorandum, Paul, Weiss, Rifkind, Wharton & Garrison LLP, DOJ, FBI, and CFTC
Announce FCPA Policy Revisions and Initiatives (Mar. 15, 2019), https://www.paulweiss.com/media/3978517/15mar19-doj-
fcpa-revs.pdf.
7
abiding companies, who might otherwise walk away from worthwhile investments due to the risk of FCPA
enforcement.”9
The policy revisions codified two changes announced in speeches last year.10 The revisions extend the
policy’s presumption of a declination to companies that, through timely due diligence during a mergers and
acquisitions process, uncover corrupt conduct, voluntarily disclose such conduct, and provide full
cooperation in an ensuing investigation. The revisions also relax a key component of the so-called “Yates
Memo,” which provided that companies could receive credit only by “identify[ing] all individuals” involved
in misconduct and by “completely disclos[ing] . . . all relevant facts about individual misconduct.”11 The
DOJ no longer will require companies seeking to qualify for voluntary disclosure credit to provide
information on all employees tied to the misconduct, which the DOJ described as “not practical.”12 The
revised policy now requires that companies simply disclose information about “all individuals substantially
involved” in the misconduct.13 The revised policy also relaxes the requirement that companies prohibit
employees from using “ephemeral messaging platforms that undermine the company’s ability to
appropriately retain business records or communications,” permitting the use of such messaging platforms
but requiring that companies implement “appropriate guidance and controls.”14
Following on the update to the policy in March, the DOJ in November announced additional revisions to
clarify the requirements concerning a company’s voluntary disclosures of potential FCPA violations to the
DOJ. The revised policy makes three key clarifications:
To receive credit for voluntary self-disclosure of wrongdoing, a company must disclose “all relevant
facts known to it at the time of the disclosure, including as to any individuals substantially involved
in or responsible for the misconduct at issue.” This change emphasizes the DOJ’s desire for prompt
disclosure, while acknowledging that such disclosure could come before an internal investigation
can be completed;
To receive full cooperation credit, a company that “is aware of relevant evidence not in the
company’s possession . . . must identify that evidence” to the DOJ, clarifying a prior requirement
9 Benczkowski Remarks, supra. 10 See Matthew S. Miner, Dep’t of Justice Deputy Assistant Attorney General, Remarks at the American Conference Institute 9th
Global Forum on Anti-Corruption Compliance in High Risk Markets (July 25, 2018), https://www.justice.gov/opa/pr/deputy-
assistant-attorney-general-matthew-s-miner-remarks-american-conference-institute-9th; Rod J. Rosenstein, Dep’t of Justice
Deputy Attorney General, Remarks at the American Conference Institute’s 35th International Conference on the Foreign
Corrupt Practices Act (Nov. 29, 2018), https://www.justice.gov/opa/speech/deputy-attorney-general-rod-j-rosenstein-
delivers-remarks-american-conference-institute-0. 11 See Memorandum from Sally Q. Yates, Deputy Att’y Gen., U.S. Dep’t of Justice, to Heads of Dep’t Components & All U.S.
Attorneys (Sept. 9, 2015), https://www.justice.gov/archives/dag/file/769036/download. 12 See Rod J. Rosenstein, Dep’t of Justice Deputy Attorney General, Remarks at the American Conference Institute’s 35th
International Conference on the Foreign Corrupt Practices Act (Nov. 29, 2018), https://www.justice.gov/opa/speech/deputy-
attorney-general-rod-j-rosenstein-delivers-remarks-american-conference-institute-0. 13 Justice Manual, § 9-47.120(3)(a). 14 Justice Manual, § 9-47.120(3)(c).
8
that a company that “is or should be aware of opportunities for the Department to obtain relevant
evidence not in the company’s possession and not otherwise known to the Department . . . must
identify those opportunities”; and
The “M&A Due Diligence and Remediation” guidance was revised to make clear that a
“presumption of a declination” applies where a company discovers misconduct “by the merged or
acquired entity,” clarifying that acquirers are encouraged to disclose conduct discovered post-
merger and to assure the acquirer that it will not face successor liability.15
Together, these revisions suggest that the DOJ is actively revisiting its FCPA Corporate Enforcement Policy
and taking steps to ensure greater consistency and transparency in the policy’s application, while
attempting to account for practical realities when investigating and considering enforcement actions
against corporations.
Guidance for Evaluating Corporate Compliance Programs
On April 30, 2019, the DOJ’s Criminal Division released updated guidance on how prosecutors should
evaluate the effectiveness of corporate compliance programs, which include, but are not limited to, anti-
corruption compliance programs.16 The updated guidance, entitled “Evaluation of Corporate Compliance
Programs,” expands on the guidance released by the DOJ’s Fraud Section in February 2017. When
announcing the updated guidance, AAG Benczkowski noted that it is intended to “harmonize the prior
Fraud Section publication with other DOJ guidance and legal standards” and “provide additional
transparency in how [the DOJ] will analyze a company’s compliance program.”17 The updated guidance
provides a framework for how prosecutors will assess compliance programs as they consider potential
enforcement actions, and it complements the DOJ training programs, announced last October, designed to
enhance prosecutors’ understanding of compliance. Despite the new detail provided by the updated
guidance, the DOJ continues to make individualized determinations in each case and, as AAG Benczkowski
explained, continues to eschew “any rigid formula to assess the effectiveness of corporate compliance
programs.”18
The updated guidance focuses on the same topics as the 2017 guidance, which included the company’s
analysis and remediation of the underlying misconduct; the conduct of senior and middle management; the
autonomy and resources of the compliance function; policies and procedures; risk assessment; training and
15 Justice Manual, § 9-47.120. 16 See Dep’t of Justice, Criminal Division, Evaluation of Corporate Compliance Programs at 1 (Apr. 30, 2019),
https://www.justice.gov/criminal-fraud/page/file/937501/download; see also Client Memorandum, Paul, Weiss, Rifkind,
Wharton & Garrison LLP, DOJ Updated Guidance for Evaluating Corporate Compliance Programs Focuses on Effectiveness
(May 6, 2019), https://www.paulweiss.com/media/3978632/6may19-doj-compliance.pdf. 17 Brian A. Benczkowski, Assistant Att’y Gen., Dep’t of Justice, Keynote Address at the Ethics and Compliance Initiative (ECI)
2019 Annual Impact Conference (Apr. 30, 2019), https://www.justice.gov/opa/speech/assistant-attorney-general-brian-
benczkowski-delivers-keynote-address-ethics-and. 18 Id.
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communication; confidential reporting; incentives for compliance and non-compliance; periodic testing
and review; and monitoring of third-party relationships and potential mergers and acquisitions.19 The
updated guidance contains twelve topics and nearly 150 sample questions that expand on and are structured
around three “fundamental questions” concerning a compliance program’s design, implementation, and
function: (1) Is the corporation’s compliance program well designed? (2) Is the program being applied
earnestly and in good faith? (In other words, is the program being implemented effectively?) and (3) Does
the corporation’s compliance program work in practice?20
Organizing the evaluation of corporate compliance programs around these three fundamental questions
provides a useful framework for companies in designing, implementing, and testing a compliance program,
including by better enabling companies to identify business risks, mitigate them, and remediate
shortcomings.21 In addition to setting out this framework, the updated guidance provides context for each
factor to better enable companies to gauge the adequacy and effectiveness of their compliance programs.
Guidance for “Inability-to-Pay” Claims
On October 8, 2019, the Criminal Division of the DOJ released guidance on how federal prosecutors should
evaluate claims that corporations are unable to pay a proposed fine or monetary penalty.22 In announcing
the guidance, AAG Benczkowski noted that the evaluation of “inability-to-pay” claims is an area of white-
collar criminal enforcement that the DOJ has determined would benefit from greater transparency. He said
that guidance on this issue, along with recent DOJ guidance relating to compliance programs and
monitorships, is “part and parcel of [the DOJ’s] broader mission . . . to establish more predictable
guideposts by which companies can gauge expectations, conform their conduct, and act as responsible
corporate citizens.”23
The DOJ’s new guidance, entitled “Evaluating a Business Organization’s Inability to Pay a Criminal Fine or
Criminal Monetary Penalty,” sets forth a detailed framework for federal prosecutors to assess a company’s
“inability to pay” once the company and the DOJ have agreed on both a corporate criminal resolution and
an appropriate monetary penalty or fine based on the law and the facts (without considering the company’s
19 See Dep’t of Justice, Criminal Division, Fraud Section, Evaluation of Corporate Compliance Programs (Feb. 8, 2017); see also
Client Memorandum, Paul, Weiss, Rifkind, Wharton & Garrison LLP, DOJ Releases Guidance for Evaluating Corporate
Compliance Programs (Mar. 20, 2017), https://www.paulweiss.com/media/3977003/20mar17doj.pdf. 20 See Dep’t of Justice, Criminal Division, Evaluation of Corporate Compliance Programs at 1-2 (Apr. 30, 2019),
https://www.justice.gov/criminal-fraud/page/file/937501/download. 21 See Client Memorandum, Paul, Weiss, Rifkind, Wharton & Garrison LLP, DOJ Updated Guidance for Evaluating Corporate
Compliance Programs Focuses on Effectiveness (May 6, 2019), https://www.paulweiss.com/media/3978632/6may19-doj-
compliance.pdf. 22 Brian A. Benczkowski, Assistant Attorney General, Criminal Division, U.S. Dep’t of Justice, Evaluating a Business
Organization’s Inability to Pay a Criminal Fine or Criminal Monetary Penalty (Oct. 8, 2019), https://www.justice.gov/opa/
speech/file/1207576/download; see also Client Memorandum, Paul, Weiss, Rifkind, Wharton & Garrison LLP, DOJ Announces
Guidance for “Inability-to-Pay” Claims (Oct. 10, 2019), https://www.paulweiss.com/media/3979024/10oct19-inability-to-pay-
claims.pdf. 23 Assistant Attorney Gen. Brian A. Benczkowski, Remarks at the Global Investigations Review Live New York (Oct. 8, 2019),
https://www.justice.gov/opa/speech/assistant-attorney-general-brian-benczkowski-delivers-remarks-global-investigations.
10
assertion that it is unable to pay). As part of the DOJ’s evaluation process, companies claiming that they
cannot afford a criminal fine or penalty must timely submit to the DOJ a completed “Inability-to-Pay
Questionnaire” that focuses primarily on the company’s financial condition and projections. The
questionnaire also asks for a number of additional financial materials, including, among other things,
current and prior financial statements, recent federal corporate income tax returns, recent appraisals and
valuation studies, copies of current credit and loan agreements, and compensation information for the ten
most highly compensated employees in the company.
The DOJ’s guidance directs prosecutors to use the information gathered from the company’s responses to
the questionnaire to make an initial determination about the company’s ability to pay a proposed fine or
monetary penalty based on its current assets, liabilities, and cash flows. If prosecutors determine that a
company is unable to pay an appropriate criminal fine or monetary penalty, the guidance instructs them to
recommend an adjustment to avoid threatening the company’s continued viability and/or impairing the
company’s ability to provide restitution to victims.
The new guidance is likely to serve as an additional tool that companies facing challenging financial
circumstances may utilize to make strategic decisions about regulatory matters, including on issues such as
self-disclosure, cooperation with the DOJ, and whether to advance inability-to-pay claims. Companies now
have guidance beyond what could be gleaned from previous corporate resolutions, which, prior to issuance
of the new guidance, did not provide detailed information on how the DOJ assessed corporate fine or
penalty reductions based on an inability to pay.
China Initiative
Following the DOJ’s announcement in November 2018 of the “China Initiative”—an effort to counter
perceived national security threats to the United States from China, including by identifying FCPA cases
involving Chinese companies that compete with American businesses—Attorney General William Barr
declared in June 2019 that the DOJ must “continue to pursue, and indeed step up, our China initiative.”24
More recently, in November 2019, Assistant Attorney General John Demers stated that “the future of the
China Initiative will depend on future Chinese behavior.”25
In connection with the China Initiative, the DOJ announced a number of China-related prosecutions in
2019, although only one appears to involve FCPA charges.26 On November 14, 2019, the DOJ announced
FCPA charges against Yanliang Li and Hongwei Yang, two former executives of a Chinese subsidiary of
24 See William P. Barr, Att’y Gen., Dep’t of Justice, Opening Remarks at the U.S. Attorney’s Conference (June 26,
2019), https://www.justice.gov/opa/speech/attorney-general-william-p-barr-delivers-opening-remarks-us-attorneys-
conference. 25 See Gina Jurva, Reuters Newsmaker: Government Experts Discuss U.S./China Trade, Intellectual Property Theft, & Cyber-
Espionage, REUTERS (Nov. 4, 2019), https://blogs.thomsonreuters.com/answerson/reuters-newsmaker-china-cyber-
espionage/. 26 See Dep’t of Justice, Information About the Department of Justice’s China Initiative and a Compilation of China Related
Criminal Cases Since Jan. 2018 (Dec. 4, 2019), https://www.justice.gov/opa/page/file/1223496/download.
11
Herbalife Nutrition, the Los Angeles-based marketing corporation that sells healthcare, personal care, and
other products around the world.27 The executives were charged with conspiring to violate the FCPA’s anti-
bribery and internal control provisions. The SEC also announced related civil charges against Li. According
to the allegations in the indictment, from approximately 2007 through 2017, Li, Yang, and others paid
bribes to Chinese officials to obtain and retain licenses for Herbalife—which previously disclosed that the
DOJ and the SEC were conducting an investigation into the company’s FCPA compliance in China28—to
operate as a direct-selling enterprise in provinces throughout China. Although Herbalife is a U.S. company,
the DOJ apparently considers its prosecutions of Li and Yang to be China-related cases under the China
Initiative.29
Notably, on December 13, 2019, the United States and China announced a limited trade agreement, with
China agreeing to purchase certain American products in exchange for the United States halting the
imposition of new tariffs and reducing other existing levies.30 Robert E. Lighthizer, President Trump’s chief
negotiator, has stated that the trade deal is intended to be a “building block in building up something that
will actually lead to the ability for the two systems to work together,”31 and commentators suggest that this
phase-one deal marks a significant turning point in U.S.-China relations. To the extent the China Initiative
seeks to promote “fair trade and good relationships based on honest dealing” with China, as former Attorney
General Jeff Session explained,32 it remains to be seen whether the trade deal with China will impact the
DOJ’s enforcement policy.
SEC Corporate Enforcement
In 2019, the SEC resolved 13 corporate enforcement actions and assessed $1 billion in penalties.
27 See Indictment, U.S. v. Li, No. 19-CR-760 (S.D.N.Y. Nov. 14, 2019); Press Release, Dep’t of Justice, Two Former Executives of
the China Subsidiary of a Multi-Level Marketing Company Charged for Scheme to Pay Foreign Bribes and Circumvent
Internal Accounting Controls (Nov. 14, 2019), https://www.justice.gov/opa/pr/two-former-executives-china-subsidiary-multi-
level-marketing-company-charged-scheme-pay; see also Dylan Tokar, Former Herbalife Executives Charged With Conspiracy
to Bribe Chinese Officials, WALL ST. J. (Nov. 15, 2019), https://www.wsj.com/articles/former-herbalife-executives-charged-
with-conspiracy-to-bribe-chinese-officials-11573848075. 28 See Herbalife Nutrition, Current Report (Form 8-K, Ex. 99.1) (Jan. 20, 2017), https://www.sec.gov/Archives/edgar/data/
1180262/000119312517013649/d322807dex991.htm. 29 See Dep’t of Justice, Information About the Department of Justice’s China Initiative and a Compilation of China Related
Criminal Cases Since Jan. 2018 (Dec. 4, 2019), https://www.justice.gov/opa/page/file/1223496/download. 30 See William Mauldin, Lingling Wei & Alex Leary, U.S., China Agree to Limited Deal to Halt Trade War, WALL ST. J. (Dec. 13,
2019), https://www.wsj.com/articles/us-china-confirm-reaching-phase-one-trade-deal-11576234325?mod=article_
inline&mod=article_inline. 31 See David J. Lynch, Even as the U.S. and China Agree to Trade Truce, They Are Edging Toward Partial Economic Divorce,
WASH. POST (Dec. 27, 2019), https://www.washingtonpost.com/business/economy/trade-talks-between-us-china-mask-threat-
of-a-divorce/2019/12/27/a4da3e72-2370-11ea-bed5-880264cc91a9_story.html. 32 See Dep’t of Justice, Att’y General Jeff Sessions, Announcement of New Initiative to Combat Chinese Economic Espionage
(Nov. 1, 2018), https://www.justice.gov/opa/speech/attorney-general-jeff-sessions-announces-new-initiative-combat-chinese-
economic-espionage.
12
Based on the companies’ public announcements, the SEC apparently closed its investigations into at least
five companies that had been under investigation for potential FCPA offenses (PAR Technology Corp.,
Gerdau S.A., OSI Systems, Inc., Misonix, Inc., and Ciena Corp.). As with the DOJ’s decisions to close various
investigations, it is difficult to draw any conclusions from these decisions, including whether there was any
identified conduct that violated the FCPA.
SEC Whistleblower Program
In fiscal year 2019, the SEC received its second highest number of whistleblower tips since the start of the
whistleblower program in 2011.33 As reflected below, the SEC received 5,212 tips, 70 fewer than the record-
setting high in 2018. FCPA-related whistleblower tips declined for the third year in a row, though the
number of FCPA-related tips received in 2019 (200) was essentially the same as the number in 2018 (202).
The SEC issued awards totaling $60 million to eight whistleblowers, an award amount comparable to prior
years, although significantly less than the $168 million awarded in fiscal year 2018. These awards included
a $50 million award to two individuals, which is the SEC’s third largest award since the start of the
whistleblower program. The SEC also awarded more than $4.5 million to a whistleblower whose tip
triggered Zimmer Biomet Holdings Inc. to conduct an internal investigation that led the company to self-
report and eventually settle DOJ and SEC investigations into alleged FCPA violations.34
SEC WHISTLEBLOWER TIPS AND TOTAL WHISTLEBLOWER AWARDS 2015–2019 33 See U.S. SEC. & EXCH. COMM’N, 2019 ANNUAL REPORT TO CONGRESS: WHISTLEBLOWER PROGRAM (Nov. 15, 2019),
https://www.sec.gov/files/sec-2019-annual-report-whistleblower-program.pdf. As stated in the SEC’s report, statistics
regarding whistleblower tips are current through the end of its fiscal year on September 30, 2019. 34 See Mengqi Sun & Kristin Broughton, SEC Issues $4.5 Million Whistleblower Award, WALL ST. J. (May 24, 2019),
https://www.wsj.com/articles/sec-issues-4-5-million-whistleblower-award-11558738601; see also In the Matter of the Claim
for Award, Exchange Act Release No. 85936 (May 24, 2019), https://www.sec.gov/rules/other/2019/34-85936.pdf.
13
The map below shows the geographic distribution of whistleblower tips from foreign countries in 2019.35
The SEC received tips from 70 countries. The largest number of tips came from the United States, Canada,
the United Kingdom, and Germany. The large number of countries from which tips emanated continues to
suggest, as it has in recent years, that contacting the SEC’s whistleblower program has become a more well-
known and accepted practice internationally.
2019 FCPA SEC WHISTLEBLOWER TIPS — WORLDWIDE
In addition, the SEC’s Office of the Whistleblower has proposed amendments to the SEC’s whistleblower
regulations that would clarify the requirements for anti-retaliation protections under the whistleblower
statute and increase efficiencies in the claims review process.36 The SEC is reviewing public comments on
the proposed amendments and anticipates that the new rules will be adopted in 2020.
35 This map does not depict the 3,262 tips from the United States and its territories. 36 See U.S. SEC. & EXCH. COMM’N, 2019 ANNUAL REPORT TO CONGRESS: WHISTLEBLOWER PROGRAM at 2 (Nov. 15, 2019),
https://www.sec.gov/files/sec-2019-annual-report-whistleblower-program.pdf; see also Whistleblower Program Rules,
Release No. 34-83557 (proposed June 28, 2018) (to be codified at 17 C.F.R. pts. 240, 249).
14
New SEC Policy Affecting Corporate Enforcement
On July 3, 2019, as part of the SEC’s efforts to improve the effectiveness and efficiency of settlement
negotiations, SEC Chairman Jay Clayton announced a new approach to how the SEC will consider
contemporaneous settlement offers and waiver requests from defendants.37
As Chairman Clayton explained in announcing the new approach, the imposition of certain types of relief
by the SEC and other authorities in connection with settlement agreements can have significant collateral
consequences, such as subjecting an entity to disqualifications that, as a practical matter, can prohibit the
entity from continuing to conduct certain businesses. He explained that, in certain cases, these collateral
consequences may not be appropriate, including because other measures may more appropriately address
the conduct at issue and because of related investor protection considerations. In many cases, the SEC has
the authority to grant a waiver from these collateral consequences, either in full or subject to conditions.
Parties seeking settlements with the SEC consequently often make contemporaneous settlement offers and
waiver requests.
Previously, the SEC’s practice in determining whether to grant or deny a waiver request made
contemporaneously with a settlement offer was to decide the two matters separately and independently.
According to Chairman Clayton, this practice “may not produce the best outcome for investors in all
circumstances,” including because it can complicate and lengthen the negotiating process and can
unnecessarily burden SEC resources. Accordingly, Chairman Clayton announced that a settling entity can
request that the SEC consider a settlement offer that simultaneously addresses both the underlying
enforcement action and any related collateral consequences. He explained that this approach will enable
the SEC “to consider the proposed settlement and waiver request contemporaneously, along with the
relevant facts and conduct, and the analysis and advice of the relevant [SEC] divisions to assess whether
the proposed resolution of the matter in its entirety best serves investors and the [SEC’s] mission more
generally.”
CFTC Developments
On March 6, 2019, James M. McDonald, the Director of Enforcement of the U.S. Commodity Futures
Trading Commission (“CFTC”), announced for the first time the CFTC’s commitment to investigating cases
involving foreign corrupt practices in violation of the Commodity Exchange Act (“CEA”), and the CFTC
published a new Enforcement Advisory that announced a leniency program for companies and individuals
that cooperate and self-report foreign corrupt practices to the CFTC.38 Director McDonald also disclosed
that the CFTC already had open investigations involving corruption in commodities markets.
37 See Jay Clayton, Chairman, Sec. Exch. Comm’n, Statement Regarding Offers of Settlement (July 3, 2018),
https://www.sec.gov/news/public-statement/clayton-statement-regarding-offers-settlement. 38 James M. McDonald, Commodity Futures Trading Commission Director of Enforcement, Remarks at the American Bar
Association’s National Institute on White Collar Crime (Mar. 6, 2019) (hereinafter, “McDonald Remarks”),
https://www.cftc.gov/PressRoom/SpeechesTestimony/opamcdonald2; see also Client Memorandum, Paul, Weiss, Rifkind,
15
The announcements characterized the CFTC’s involvement in foreign bribery investigations as part of a
continued effort among U.S. agencies to coordinate the investigation of foreign corrupt practices and the
imposition of corporate penalties to avoid “piling on,” though at the same time it marks a new programmatic
effort by the CFTC to address foreign bribery in the commodities markets. In remarks at the American Bar
Association’s National Institute on White Collar Crime, Director McDonald emphasized coordination
efforts among the CFTC, the DOJ, and the SEC, noting that the CFTC is working closely with these
enforcement agencies “to avoid duplicative investigative steps.”39 Director McDonald said that the CFTC
will not “pile onto” other existing investigations and that it will provide dollar-for-dollar credit for
disgorgement or restitution payments in related actions when it imposes monetary penalties. He added
that the CFTC whistleblower program, established in 2011 under the Dodd-Frank Act, will apply to CEA
violations involving foreign corruption. In May 2019, the CFTC published its first whistleblower alert on
how to report foreign corruption in the commodities and derivatives markets.40
Although the CEA does not, on its face, penalize corruption, Director McDonald—a former Assistant U.S.
Attorney in the Public Corruption Unit for the Southern District of New York—identified several examples
of corrupt practices that “might constitute fraud, manipulation, false reporting, or a number of other types
of violations under the CEA,” including: bribes to secure business in connection with regulated activities
like trading, advising, or dealing in swaps or derivatives; corrupt practices used to manipulate benchmarks
that serve as the basis for related derivatives contracts; prices that are the product of corruption and are
falsely reported to benchmarks; or corrupt practices that alter the prices in commodity markets that drive
U.S. derivatives prices.41
The CFTC’s commitment to investigating foreign corrupt practices is not entirely new, but arises out of the
agency’s efforts to charge cases in parallel with FCPA investigations.42 For instance, on June 4, 2018, the
DOJ announced an FCPA resolution involving Société Générale S.A., a Paris-based financial services
company, which agreed to pay over $860 million in penalties to resolve criminal charges in France and the
United States in connection with charges of bribery and interest rate manipulation.43 On the same day, the
Wharton & Garrison LLP, DOJ, FBI, and CFTC Announce FCPA Policy Revisions and Initiatives (Mar. 15, 2019),
https://www.paulweiss.com/media/3978517/15mar19-doj-fcpa-revs.pdf. 39 McDonald Remarks, supra. 40 See Commodity Futures Trading Commission, CFTC Whistleblower Alert: Blow the Whistle on Foreign Corrupt Practices in
the Commodities and Derivatives Markets (May 2019), https://www.whistleblower.gov/system/files/2019/11/1572624133/
FCP%20WBO%20Alert%20-%20May%202019.pdf. 41 McDonald Remarks, supra. 42 See Commodity Futures Trading Commission, 2018 Annual Report on the Division of Enforcement at 12-13 (Nov. 2018),
https://www.cftc.gov/sites/default/files/2018-11/ENFAnnualReport111418_0.pdf. 43 See Deferred Prosecution Agreement, U.S. v. Société Générale S.A., No. 18-CR-253 (E.D.N.Y. June 5, 2018); Press Release,
Dep’t of Justice, Société Générale S.A. Agrees to Pay $860 Million in Criminal Penalties for Bribing Gaddafi-Era Libyan
Officials and Manipulating LIBOR Rate (June 4, 2018), https://www.justice.gov/opa/pr/soci-t-g-n-rale-sa-agrees-pay-860-
million-criminal-penalties-bribing-gaddafi-era-libyan; see also Client Memorandum, Paul, Weiss, Rifkind, Wharton & Garrison
LLP, Société Générale and Legg Mason to Pay Nearly $650 Million to Resolve DOJ Investigation of Libyan Bribery Scheme
(June 7, 2018), https://www.paulweiss.com/media/3977841/7jun18-socgen.pdf.
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CFTC accepted a settlement offer ordering Société Générale to pay $475 million in regulatory penalties and
disgorgement in connection with similar interest rate manipulation charges.44
The CFTC’s related Advisory on Self Reporting and Cooperation for CEA Violations Involving Foreign
Corrupt Practices provides incentives to report CEA violations involving foreign corrupt practices.45 Absent
aggravating circumstances, that Advisory provides a presumption that the CFTC Enforcement Division will
recommend a resolution with no civil monetary penalty if a company or individual that is not registered
with the CFTC timely and voluntarily self-discloses, fully cooperates, and appropriately remediates.
Aggravating circumstances that may negate the presumption include, but are not limited to, involvement
by executive management of the company in the misconduct, pervasiveness of the misconduct within the
company, and recidivism. In all instances, the CFTC Enforcement Division will “still require payment of all
disgorgement, forfeiture, and/or restitution resulting from the misconduct at issue.”46
Since issuing the enforcement advisory, the CFTC has launched at least one investigation concerning
potentially corrupt practices related to commodities, but it has yet to announce any resolutions.47
Legislative Developments
In August 2019, the Foreign Extortion Prevention Act (“FEPA”) was introduced in the U.S. House of
Representatives to prohibit foreign officials from demanding or receiving bribes.48 The bipartisan bill
makes it illegal for a foreign official to demand or receive anything of value in return for “being influenced
in the performance of any official act” or “being induced to do or omit to do any act in violation of the official
duty of such official or person.” The bill has been referred to the Subcommittee on Crime, Terrorism, and
Homeland Security.
Because foreign officials who demand and receive bribes may not be covered by the FCPA, if adopted, FEPA
could be an important tool in aiding U.S. authorities in combating corruption.
44 See In re Société Générale S.A., CFTC No. 18-14, 2018 WL 2761752 (June 4, 2018) (consent order) (benchmark manipulation). 45 See Commodity Futures Trading Commission, Advisory on Self Reporting and Cooperation for CEA Violations Involving
Foreign Corrupt Practices (Mar. 6, 2019), https://www.cftc.gov/sites/default/files/2019-03/enfadvisoryselfreporting
030619.pdf. 46 Due to independent reporting obligations, futures professionals registered with the CFTC are ineligible for a resolution with no
civil monetary penalty, but registrants that timely and voluntarily self-disclose, fully cooperate, and appropriately remediate
will receive a recommended “substantial reduction in the civil monetary penalty.” Id. 47 See Press Release, Glencore plc, Announcement re the Commodity Futures Trading Commission (Apr. 25, 2019),
https://www.glencore.com/dam/jcr:88992a99-239b-4e93-a7c1-e5d52212817f/201904251930-CFTC-annnouncement-re-the-
commodity-futures-trading-commission.pdf. 48 See Foreign Extortion Prevention Act, H.R. 4140, 116th Cong. (2019).
17
Compliance Monitors
In 2019, U.S. authorities imposed four compliance monitors in FCPA cases, as reflected in the chart below.49
The DOJ and the SEC both imposed a monitor in three of the four cases (Ericsson, Fresenius Medical Care
AG & Co. KGaA, and MTS), and only the DOJ imposed one in the fourth case (Walmart Inc.).50 This marks
an increase from 2018, when the DOJ imposed only one monitor and the SEC only imposed one consultant
and no monitors. The increase is noteworthy given the so-called “Benczkowski Memorandum,” a 2018
memorandum which highlights factors that prosecutors should consider when deciding whether to impose
a monitor and which emphasizes that a company’s remediation efforts may obviate the need to impose an
independent monitor under certain circumstances.
COMPLIANCE OVERSIGHT IN CORPORATE FCPA RESOLUTIONS 2015–2019
49 Monitors and consultants imposed in corporate resolutions are counted based on a variety of considerations. Where the
resolution involves both a parent and a subsidiary and/or both the DOJ and the SEC, whether more than one
monitor/consultant is counted depends upon whether one individual appears to be serving in multiple capacities or multiple
individuals appear to be serving in different capacities. This analysis is based upon the corporate resolution documents and, if
necessary, third-party resources. 50 See Deferred Prosecution Agreement, U.S. v. Telefonaktiebolaget LM Ericsson, No. 19-cr-00884(AJN) (S.D.N.Y. Dec. 6, 2019),
https://www.justice.gov/criminal-fraud/file/1226521/download; Press Release, SEC, SEC Charges Multinational
Telecommunications Company with FCPA Violations (Dec. 6, 2019), https://www.sec.gov/news/press-release/2019-254;
Non-Prosecution Agreement, U.S. v. Fresenius Medical Care AG & Co. KGaA (Feb. 25, 2019),
https://www.justice.gov/opa/press-release/file/1148951/download; In the Matter of Fresenius Medical Care AG & Co. KGaA,
Exchange Act Release No. 85468 (Mar. 29, 2019), https://www.sec.gov/litigation/admin/2019/34-85468.pdf; Non-
Prosecution Agreement, U.S. v. Walmart, Inc., No. 19-cr-192 (E.D.Va. June 20, 2019), https://www.justice.gov/
criminal-fraud/page/file/1177596/download; Deferred Prosecution Agreement, U.S. v. Mobile TeleSystems PJSC, No. 19-cr-
00167(JPO) (S.D.N.Y. Feb. 22, 2019), https://www.justice.gov/criminal-fraud/file/1147381/download; In the Matter of Mobile
TeleSystems PJSC, Exchange Act Release No. 85621 (Mar. 6, 2019), https://www.sec.gov/litigation/admin/2019/34-
85261.pdf.
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Review of Select Corporate Resolutions
In 2019, the DOJ and the SEC resolved a combined 20 corporate enforcement actions. We summarize
below select resolutions from the past year.
MTS
On March 6 and 7, 2019, the DOJ and the SEC announced settlements with MTS, Russia’s largest
telecommunications provider, involving violations of the FCPA.51 The resolutions, which include penalties,
forfeiture, and disgorgement totaling $850 million, relate to a scheme to bribe Uzbek officials—including
Gulnara Karimova, the daughter of the former president of Uzbekistan—to obtain and retain business in
Uzbekistan that is similar to the scheme that led to the $795 million resolutions in 2016 with VimpelCom
Limited, a Netherlands-based telecommunications company, and the $965 million resolutions in 2017 with
Telia Company AB, a telecommunications company based in Sweden.
The DOJ filed a two-count criminal information in the U.S. District Court for the Southern District of
New York charging MTS, a foreign “issuer” within the meaning of the FCPA, with conspiracy to violate the
FCPA and violations of the books and records and internal controls provisions of the FCPA. MTS entered
into a deferred prosecution agreement with the DOJ and agreed to pay a criminal fine and forfeiture in the
amount of $850 million. KolorIt Dizayn Ink LLC (“KolorIt”), a wholly-owned subsidiary of MTS, pleaded
guilty to a charge of conspiracy to violate the FCPA. The $850 million penalty includes a criminal fine of
$500,000 plus forfeiture of an additional $40 million that MTS agreed to pay on KolorIt’s behalf. MTS also
consented to the SEC’s order finding that it violated the FCPA’s anti-bribery, books and records, and
internal accounting control provisions, and requiring it to pay a $100 million civil penalty. Pursuant to the
DOJ’s policy against “piling on,” the DOJ agreed to credit the $100 million penalty that MTS pays to the
SEC. Under the deferred prosecution agreement with the DOJ and under the SEC’s order, the company
must also retain an independent compliance monitor for at least three years.
Combined with the resolutions with VimpelCom and Telia, the resolution with MTS brings the total fines,
criminal forfeiture, and disgorgement assessed by the DOJ and the SEC against bribe payors in the
Uzbekistan telecommunications market scandal to over $2.6 billion. Those resolutions relied on extensive
international cooperation between the U.S. enforcement agencies and authorities in numerous European
countries.
In addition, the DOJ brought FCPA and money laundering conspiracy charges against a former executive
of Uzdunrobita LLC, a telecommunications operator in Uzbekistan and an MTS subsidiary.52 The DOJ also
51 See Letter from Robert A. Zink, et al. to Gary DiBianco, et al. (Feb. 22, 2019), https://www.justice.gov/opa/press-release/file/
1141631/download; In the Matter of Mobile TeleSystems PJSC, Exchange Act Release No. 85261 (Mar. 6, 2019),
https://www.sec.gov/litigation/admin/2019/34-85261.pdf; see also Client Memorandum, Paul, Weiss, Rifkind, Wharton &
Garrison LLP, Mobile TeleSystems PJSC Reaches $850 Million Resolutions With DOJ and SEC Over FCPA Violations (Mar. 12,
2019), https://www.paulweiss.com/media/3978492/12mar19-mts-fcpa.pdf. 52 See Indictment, U.S. v. Karimova, No. 19-CR-165 (S.D.N.Y. Mar. 7, 2019).
19
brought money laundering charges, but not FCPA charges, against Karimova, who is serving a prison
sentence in Uzbekistan for embezzlement and extortion.53 The United States does not have an extradition
agreement with Uzbekistan. Additionally, the DOJ filed civil complaints seeking forfeiture of $850 million
held in bank accounts in Switzerland, Belgium, Luxembourg, and Ireland, which the DOJ alleges constitute
bribe payments made by MTS, VimpelCom and Telia to Karimova.54
Telefônica Brasil
On May 9, 2019, the SEC assessed a $4.1 million civil penalty against Telefônica Brasil to resolve allegations
that the company’s internal accounting controls failed to protect sufficiently against the risk that things of
value, including World Cup tickets and related hospitality, would be given improperly to government
officials, and that the company inaccurately recorded such expenses in its books and records, all in violation
of the accounting provisions of the FCPA.55 Telefônica Brasil agreed to settle the allegations without
admitting or denying the SEC’s findings.
The SEC alleged that Telefônica Brasil, a subsidiary of Telefônica S.A., a Spanish multinational broadband
and telecommunications provider, failed to devise and maintain sufficient internal accounting controls
regarding a hospitality program that the company hosted in connection with the 2014 World Cup and the
2013 Confederations Cup. Telefônica Brasil, a foreign issuer whose American Depository Receipts
(“ADRs”)—certificates issued by U.S. banks representing a number of shares of investment in a foreign
company’s stock—trade on the New York Stock Exchange, allegedly offered and provided tickets and
hospitality to government officials who were directly involved with, or in a position to influence,
government actions affecting the company’s business. In total, Telefônica Brasil allegedly provided World
Cup and Confederations Cup tickets and related hospitality with a combined total value of nearly $740,000
to approximately 127 government officials between 2012 and 2014.
According to the SEC, although Telefônica Brasil had in place a general code of ethics that prohibited these
gifts to public officials, it was not followed due to a lack of internal accounting controls, a compliance
breakdown, and a deficient internal audit function. Additionally, the SEC alleged that, because the
company recorded the ticket purchases and hospitality as being for general advertising and publicity
purposes, when in fact the tickets and related hospitality were given to government officials, Telefônica
53 See Lisa Lambert & Chris Sanders, U.S. Indicts Gulnara Karimova in Uzbek Corruption Scheme, REUTERS (Mar. 7, 2019),
https://www.reuters.com/article/us-mob-telesystems-usa/u-s-indicts-gulnara-karimova-in-uzbek-corruption-scheme-
idUSKCN1QO2GL. 54 See Verified Compl., U.S. v. All Funds Held in Account Number CH1408760000050335300 at Lombard Odier Darier Hentsch
& CIE Bank, Switzerland, on Behalf of Takilant Ltd., and any Property Traceable Thereto, et al., No. 1:16-cv-01257-ALC
(S.D.N.Y. Feb. 18, 2016); Press Release, Dep’t of Justice, Former Uzbek Government Official and Uzbek Telecommunications
Executive Charged in Bribery and Money Laundering Scheme Involving the Payment of Nearly $1 Billion in Bribes (Mar. 7,
2019), https://www.justice.gov/usao-sdny/pr/former-uzbek-government-official-and-uzbek-telecommunications-executive-
charged-bribery. 55 See In the Matter of Telefônica Brasil S.A., Exchange Act Release No. 85819 (May 9, 2019), https://www.sec.gov/litigation/
admin/2019/34-85819.pdf; see also Client Memorandum, Paul, Weiss, Rifkind, Wharton & Garrison LLP, SEC Fines
Telefônica Brasil S.A. $4.125 Million Relating to World Cup Tickets Given to Government Officials (May 13, 2019),
https://www.paulweiss.com/media/3978643/13may19-telefonica-brasil.pdf.
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Brasil’s books and records did not, in reasonable detail, accurately and fairly reflect the disposition of the
company’s assets.
The Telefônica Brasil settlement demonstrates that providing travel and hospitality to government officials
without adequate controls and oversight is a high-risk activity from an FCPA perspective. This settlement
also reflects the SEC’s willingness to bring enforcement actions exclusively under the FCPA’s accounting
provisions—even if there is no evidence of a quid pro quo or any improperly awarded business or
government action—when the SEC is not satisfied that the issuer’s internal accounting controls and anti-
corruption compliance program are sufficient to manage corruption risks. That is, the SEC may bring an
enforcement action when it believes that anti-corruption compliance controls leave an unacceptable level
of risk of bribery.
Walmart
On June 20, 2019, the DOJ and the SEC announced long-awaited resolutions with Walmart for violations
of the books and records and internal accounting provisions of the FCPA.56 In addition to entering into a
three-year non-prosecution agreement and agreeing to the imposition of a compliance monitor for two
years, Walmart agreed to pay approximately $138 million to settle the DOJ’s criminal charges and
$144 million to resolve parallel civil charges brought by the SEC. Walmart also consented to the SEC’s
finding that it violated the books and records and internal accounting provisions of the FCPA. In connection
with the resolution, WMT Brasilia, S.a.r.l. (“WMT”), Walmart’s wholly-owned Brazilian subsidiary, pleaded
guilty to a one-count criminal information charging it with a violation of the FCPA’s books and records and
internal accounting provisions.
The DOJ and the SEC alleged that, from 2000 until 2011, Walmart personnel responsible for implementing
and maintaining the company’s internal accounting controls were aware of certain compliance failures,
including relating to potentially improper payments to government officials. The internal controls failures
allowed Walmart’s foreign subsidiaries in Brazil, China, Mexico, and India to hire third-party
intermediaries without sufficient controls to prevent those intermediaries from making improper payments
to government officials in return for store permits and licenses. In a number of instances, shortcomings in
Walmart’s internal accounting controls at these foreign subsidiaries were reported to senior Walmart
executives. The internal controls failures allowed the foreign subsidiaries to open stores faster than they
otherwise would have been able, enabling Walmart to earn additional and improper profits through these
subsidiaries.
According to the DOJ, these violations were attributable, at least in part, to a policy that favored rapid
international expansion over compliance. As AAG Benczkowski observed, “Walmart profited from rapid
56 See Letter from Robert Zink to Karen P. Hewitt (June 20, 2019), https://www.justice.gov/opa/press-release/file/1175791/
download; In the Matter of Walmart, Inc., Exchange Act Release No. 86159, ¶¶ 48-51 (June 20, 2019), https://www.sec.gov/
litigation/admin/2019/34-86159.pdf; see also Client Memorandum, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Walmart
Agrees to Pay $282 Million to Resolve DOJ and SEC FCPA Charges (June 25, 2019), https://www.paulweiss.com/media/
3978734/25jun19-walmart.pdf.
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international expansion, but in doing so chose not to take necessary steps to avoid corruption.”57 These
compliance failures precipitated an eight-year internal investigation and extensive remediation, as well as
numerous lawsuits, generating legal fees and other expenses nearing $1 billion, excluding the $282 million
settlement. Indeed, in fiscal years 2016 through 2018 alone, the company spent more than $265 million on
investigations and compliance enhancements.58
The DOJ and SEC settlements with Walmart were based on violations of the FCPA’s accounting provisions,
without any anti-bribery charges. Neither the DOJ nor the SEC charged actual knowledge or even willful
blindness of actual bribery on the part of Walmart, despite the numerous allegations in the charging
documents of knowledge of improper payments made to foreign officials, of deficient controls, and of
awareness that Walmart was expanding internationally at an expedited rate. Although the amount of
Walmart’s settlements with the DOJ and the SEC may seem small compared with recent large settlements,
such as MTS ($850 million), the SEC settlement alone is substantial when compared with other “risk of
bribery” cases, such as the SEC’s recent settlement with Telefônica Brasil ($4.1 million). The significant
expenditures the company incurred as a result of the misconduct serve as an important reminder of the
value of having a clear and well-established compliance program in place before expanding abroad, and
especially in countries in which corruption risk is substantial.
TFMC
On June 25, 2019, the DOJ announced a resolution with Technip FMC PLC (“TFMC”), a London-
headquartered, global provider of oil and gas technology and services that is listed on the New York Stock
Exchange, for conspiracy to violate the FCPA’s anti-bribery provisions.59 Subsequently, on September 23,
TFMC entered into a cease-and-desist order with the SEC for alleged violations of the FCPA’s anti-bribery,
books and records, and internal accounting controls provisions.
TFMC entered into a three-year deferred prosecution agreement with the DOJ and agreed to pay a
combined total criminal fine of more than $296 million to resolve charges with the DOJ and with the
Advogado-Geral da União (“AGU”), the Controladoria-Geral da União (“CGU”), and the Ministério Público
Federal (“MPF”) in Brazil.60 TFMC agreed to pay approximately $82 million in fines to the DOJ, which also
57 Press Release, Dep’t of Justice, Walmart Inc. and Brazil-Based Subsidiary Agree to Pay $137 Million to Resolve Foreign
Corrupt Practices Act Case (June 20, 2019), https://www.justice.gov/opa/pr/walmart-inc-and-brazil-based-subsidiary-agree-
pay-137-million-resolve-foreign-corrupt. 58 See Walmart Inc., Annual Report, Form 10-K, 80 (Mar. 30, 2018), https://s2.q4cdn.com/056532643/files/doc_financials/
2018/annual/WMT-2018_Annual-Report.pdf. 59 See Deferred Prosecution Agreement, U.S. v. TechnipFMC plc, No. 19-CR-278 (E.D.N.Y. June 25, 2019); see also Client
Memorandum, Paul, Weiss, Rifkind, Wharton & Garrison LLP, TechnipFMC Agrees to Pay $296 Million in Global Settlement
to Resolve Criminal FCPA Charges; SEC Civil Charges Pending (July 2, 2019), https://www.paulweiss.com/media/3978757/
2july19-technipfmc.pdf. 60 The DOJ also recognized the significant assistance provided by the governments of Australia, France, Guernsey, Italy, Monaco,
and the United Kingdom. See Press Release, Dep’t of Justice, TechnipFMC PLC and U.S.-Based Subsidiary Agree to Pay Over
$296 Million in Global Criminal Fines to Resolve Foreign Bribery Case (June 25, 2019) (hereinafter, “DOJ TFMC Press
Release”), https://www.justice.gov/usao-edny/pr/technipfmc-plc-and-us-based-subsidiary-agree-pay-over-296-million-
global-criminal-fines.
22
credited the $214 million that TFMC agreed to pay to the Brazilian authorities. As part of the DOJ
resolution, Technip USA, Inc., TFMC’s wholly-owned U.S. subsidiary, pleaded guilty to one count of
conspiracy to violate the FCPA’s anti-bribery provisions.61 The DOJ also announced that Zwi Skornicki,
formerly a consultant to TFMC, pleaded guilty in the Eastern District of New York to a one-count criminal
information charging him with conspiracy to violate the FCPA.62
The charges arose from two bribery schemes: one by TFMC’s pre-merger predecessor company, Paris-based
Technip S.A., to pay bribes to Brazilian officials, and one by its other pre-merger predecessor, Houston-
based FMC Technologies, Inc., to pay bribes to Iraqi officials.63 From 2003 to 2013, TFMC allegedly
conspired with others, including Keppel Offshore & Marine Ltd. (“KOM”)—which entered into its own
settlement with the DOJ for related FCPA violations in December 2017—to make corrupt payments in
Brazil. TFMC, Technip USA, KOM, and Skornicki are charged with conspiring to pay more than $69 million
in bribes to employees of Petróleo Brasileiro SA (“Petrobras”), the Brazilian state-owned energy company,
as well as to certain Brazilian political candidates and their political party, in return for contracts related to
oil and gas projects. TFMC also is charged with conspiring with others to bribe officials at the Iraqi Ministry
of Oil and at the South Oil Company and the Missan Oil Company, both state-owned oil companies, from
2008 to 2013, to win contracts to provide metering technologies for oil and gas production measurement
to the Iraqi government.
Three months after TFMC entered into the deferred prosecution agreement, the company consented to a
cease-and-desist order with the SEC and agreed to pay over $5 million in disgorgement and prejudgment
interest to resolve related charges.64 In light of TFMC’s settlement with the DOJ, the SEC did not impose a
civil penalty. As a condition of settlement, TFMC agreed to self-report compliance for three years, with
particular attention focused on the company’s due diligence of third-party consultants and vendors, FCPA
training, and the collection and analysis of compliance data.
These resolutions highlight the perils associated with successor liability. TFMC inherited significant FCPA
liabilities in the course of its 2017 merger. In 2010, Technip S.A., ADRs of which traded on the New York
Stock Exchange between August 2001 and November 2007, entered into a two-year deferred prosecution
agreement and a $240 million settlement with the DOJ for participating in a scheme to bribe Nigerian
government officials to obtain engineering, procurement, and construction contracts.65 Certain of the
61 See Plea Agreement, U.S. v. Technip USA, Inc., No. 19-CR-279 (E.D.N.Y. June 25, 2019), https://www.justice.gov/opa/press-
release/file/1177306/download. 62 See DOJ TFMC Press Release, supra. 63 Id. 64 See In the Matter of TechnipFMC plc., Exchange Act Release No. 87055 (Sept. 23, 2019), https://www.sec.gov/litigation/
admin/2019/34-87055.pdf. 65 See Criminal Information, U.S. v. TechnipFMC plc, No. 19-CR-278, ¶ 3; see also Press Release, Dep’t of Justice, Technip S.A.
Resolves Foreign Corrupt Practices Act Investigation and Agrees to Pay $240 Million Criminal Penalty (June 28, 2010),
https://www.justice.gov/opa/pr/technip-sa-resolves-foreign-corrupt-practices-act-investigation-and-agrees-pay-240-million.
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company’s offenses in Brazil and Iraq occurred during the pendency of the 2010 deferred prosecution
agreement and while Technip S.A. was subject to the oversight of a corporate compliance monitor.66
SHI
On November 22, 2019, the DOJ announced a three-year non-prosecution agreement with Samsung Heavy
Industries Company Ltd. (“SHI”) relating to a scheme to pay millions of dollars in bribes to officials of
Petrobras in order to cause Petrobras to charter one of SHI’s oil drillships.67 SHI agreed to pay
approximately $75 million to settle the DOJ’s criminal charges, of which 50 percent will be paid to the DOJ
and the remaining 50 percent to Brazilian authorities. In related proceedings in Brazil, SHI entered into a
memorandum of understanding and a complementary agreement for the negotiation of a leniency
agreement with the Brazilian authorities.
The DOJ alleged that, from 2007 to 2013, SHI conspired to pay approximately $20 million to Brazilian
intermediaries as commissions, while knowing that some of the money would be paid as bribes to certain
Petrobras officials. At the center of the bribery scheme was a contract between SHI and Pride International,
Inc. (“Pride”), a Houston-based offshore oil drilling company. SHI and Pride entered into an option
agreement for the purchase of one of SHI’s newly constructed oil drillships. Pride’s purchase of the ship
was contingent on Petrobras’s agreeing to charter it from Pride. By agreeing to these terms, the parties
incentivized SHI to bribe Petrobras so Pride, in turn, would exercise its option. Pride self-reported this
matter to the DOJ and the SEC in 2015, after learning of an internal audit report at Petrobras into the
negotiations of the chartering agreement and after conducting its own internal investigation.68
The $75 million criminal penalty reflects a 20-percent reduction off the bottom of the applicable U.S.
Sentencing Guidelines fine range due to SHI’s cooperation with the DOJ. SHI did not receive voluntary
disclosure credit, but it received credit for conducting a thorough internal investigation, making
presentations to the DOJ, voluntarily making foreign-based employees available for interviews, and
producing relevant documents and translations of key foreign documents where needed. SHI would have
received full credit for its cooperation, but, according to the deferred prosecution agreement, the company
failed to meet “reasonable deadlines” imposed by the DOJ.
The SHI resolution is part of the continued fallout from Operation Lava Jato (also known as Operation Car
Wash), the Brazilian corruption investigation centered on illegal payments to executives at Petrobras that
66 See Deferred Prosecution Agreement, U.S. v. TechnipFMC plc, No. 19-CR-278 (E.D.N.Y. June 25, 2019), ¶ 4(i). 67 See Deferred Prosecution Agreement, U.S. v. Samsung Heavy Industries Co. Ltd., No. 1:19-CR-328 (E.D. Va. Nov. 22, 2019)
16, https://www.justice.gov/opa/press-release/file/1219891/download; Press Release, Dep’t of Justice, Samsung Heavy
Industries Company Ltd Agrees to Pay $75 Million in Global Penalties to Resolve Foreign Bribery Case (Nov. 22, 2019),
https://www.justice.gov/opa/pr/samsung-heavy-industries-company-ltd-agrees-pay-75-million-global-penalties-resolve-
foreign; see also Client Memorandum, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Samsung Heavy Industries Agrees to Pay
$75 Million to DOJ and Brazilian Authorities to Resolve FCPA Charges (Dec. 5, 2019), https://www.paulweiss.com/media/
3979170/5dec19-samsung-heavy.pdf. 68 See Ensco plc, Quarterly Report (Form 10-Q), at 22 (Oct. 29, 2015), https://www.sec.gov/Archives/edgar/data/314808/
000031480815000204/esv-9302015x10q.htm#s3E7EAA3DF9632E8D607D8450322D1B39.
24
has been ongoing for nearly five years. The SHI resolution demonstrates that U.S. authorities are actively
enforcing the FCPA against foreign companies that have a nexus to the United States. The resolution further
demonstrates the potential risks of option contracts that are dependent on favorable government actions.
Enforcement Actions Against Individuals
Based on publicly filed charging instruments, as reflected below, in 2019, the DOJ brought FCPA charges
against 22 individuals—the highest number in recent years—and the SEC brought charges against six
individuals.69 Both authorities have continued to emphasize individual accountability, with now former
Deputy Assistant Attorney General Matthew Miner stressing the importance of “holding individuals
accountable [in order to] maximize deterrence,”70 and the SEC Division of Enforcement issuing a press
release highlighting its “focus on individual accountability” as a core priority.71 As in recent years, in 2019,
the DOJ was more active than the SEC in bringing FCPA actions against individuals. The number of
individual prosecutions brought by the DOJ under the FCPA is considerably higher than last year, but
overall both the DOJ and the SEC numbers are in line with fluctuations in recent years.
FCPA INDIVIDUAL ENFORCEMENT ACTIONS 2015–2019
69 Included in these totals are individual prosecutions and enforcement actions for FCPA charges, but not for other charges, such
as money laundering or racketeering. Actions are listed in the year of the initial filing of FCPA charges, even if unsealed in a
later year, which may result in changes to the totals for past years, as indictments from past years are unsealed. 70 See, e.g., Matthew S. Miner, Deputy Assistant Att’y General, Remarks at the 6th Annual Government Enforcement Institute
(Sept. 12, 2019), https://www.justice.gov/opa/speech/deputy-assistant-attorney-general-matthew-s-miner-delivers-remarks-
6th-annual-government. 71 See Press Release, SEC Division of Enforcement Publishes Annual Report for Fiscal Year 2019 (Nov. 6, 2019),
https://www.sec.gov/news/press-release/2019-233.
25
In 2019, FCPA charges were unsealed against four individuals.72 Three of these individuals (Andrew Pearse,
Surjan Singh, and Detelina Subeva) were charged in December 2018 with conspiracy to violate the FCPA,
although all three ultimately pleaded guilty to non-FCPA charges.73 The three individuals, investment
bankers who reside in the United Kingdom, were charged in connection with allegations that they facilitated
bribe payments to government officials in Mozambique and circumvented the internal accounting controls
of a foreign investment bank that arranged two of the loans to the government officials.74
Thirteen individuals pleaded guilty to FCPA charges in 2019.75 Among these individuals was
Robin Longoria, the manager of an international program at an Ohio-based adoption agency, who pleaded
guilty to one count of conspiracy to violate the FCPA, one count of conspiracy to commit wire fraud, and
one count of conspiracy to commit visa fraud.76 Longoria pleaded guilty in connection with her role in a
72 See Order to Unseal Indictment, U.S. v. Boustani, No. 1:18-cr-00681 (E.D.N.Y. Mar. 6, 2019); Order Granting Mot. to Unseal
Case, U.S. v. Padron-Acosta, No. 16-cr-437 (S.D. Tex. June 27, 2019). 73 See Brendan Pierson, Ex-Credit Suisse Banker Pleads Guilty to U.S. Charge Over Mozambique Loan, REUTERS (May 20, 2019),
https://www.reuters.com/article/us-mozambique-credit-suisse-charges/ex-credit-suisse-banker-pleads-guilty-to-u-s-charge-
over-mozambique-loan-idUSKCN1SQ2E1; Brendan Pierson, Second Ex-Credit Suisse Banker Pleads Guilty in Mozambique
Loan Scheme, Reuters (July 19, 2019), https://www.reuters.com/article/us-mozambique-credit-suisse-charges/ex-credit-
suisse-banker-pleads-guilty-to-u-s-charge-over-mozambique-loan-idUSKCN1SQ2E1; Patricia Hurtado, Former Credit Suisse
Banker Pleads Guilty in Money-Launder Scam, Bloomberg Law (Sept. 6, 2019), https://news.bloomberglaw.com/banking-
law/former-credit-suisse-banker-pleads-guilty-in-money-launder-scam. 74 See Indictment, U.S. v. Boustani, No. 18-CR-681 (E.D.N.Y. Dec. 19, 2018); Press Release, Dep’t of Justice, Mozambique’s
Former Finance Minister Indicted Alongside Other Former Mozambican Officials, Business Executives, and Investment
Bankers in Alleged $2 Billion Fraud and Money Laundering Scheme That Victimized U.S. Investors (Mar. 7, 2019),
https://www.justice.gov/opa/pr/mozambique-s-former-finance-minister-indicted-alongside-other-former-mozambican-
officials. 75 See Press Release, Dep’t of Justice, Micronesian Government Official Arrested in Money Laundering Scheme Involving
Foreign Bribery (Feb. 12, 2019), https://www.justice.gov/opa/pr/micronesian-government-official-arrested-money-
laundering-scheme-involving-foreign-bribery; Press Release, Dep’t of Justice, Business Executive Pleads Guilty to Foreign
Bribery Charges in Connection With Venezuela Bribery Scheme (May 29, 2019), https://www.justice.gov/opa/pr/business-
executive-pleads-guilty-foreign-bribery-charges-connection-venezuela-bribery-scheme; Press Release, Dep’t of Justice,
Technipfmc PLC and U.S.-Based Subsidiary Agree to Pay Over $296 Million in Global Criminal Fines to Resolve Foreign
Bribery Case (June 25, 2019), https://www.justice.gov/usao-edny/pr/technipfmc-plc-and-us-based-subsidiary-agree-pay-
over-296-million-global-criminal-fines; Press Release, Dep’t of Justice, Two Former Venezuelan Officials Charged and Two
Businessmen Plead Guilty in Connection With Venezuela Bribery Scheme (June 27, 2019), https://www.justice.gov/opa/pr/
two-former-venezuelan-officials-charged-and-two-businessmen-plead-guilty-connection-venezuela; Press Release, Dep’t of
Justice, Texas Woman Pleads Guilty to Conspiracy to Facilitate Adoptions From Uganda Through Bribery and Fraud
(Aug. 29, 2019), https://www.justice.gov/opa/pr/texas-woman-pleads-guilty-conspiracy-facilitate-adoptions-uganda-through-
bribery-and-fraud; Press Release, Dep’t of Justice, Oil Executives Plead Guilty for Roles in Bribery Scheme Involving Foreign
Officials (Oct. 30, 2019), https://www.justice.gov/opa/pr/oil-executives-plead-guilty-roles-bribery-scheme-involving-foreign-
officials; ECF 51, U.S. v. Pinto-Franceschi et al., No. 4:19-cr-00135 (July 31, 2019); ECF 64, U.S. v. Pinto-Franceschi et al.,
No. 4:19-cr-00135 (Aug. 21, 2019); Plea Agreement, U.S. v. Jose Luis De La Paz Roman, No. 19-20004-CR-COOKE (Jan. 25,
2019); Plea Agreement, U.S. v. Edward Thiessen, No. 19CR181(JBA) (D. Ct. July 10, 2019); Plea Agreement, U.S. v. Larry E.
Puckett, No. 19CR150(JBA) (D. Ct. June 10, 2019). 76 See Plea Agreement, U.S. v. Longoria, No. 1:19-cr-00482-CAB (N.D. Ohio Oct. 9, 2019); Press Release, Dep’t of Justice, Texas
Woman Pleads Guilty to Conspiracy to Facilitate Adoptions From Uganda Through Bribery and Fraud (Aug. 29, 2019),
https://www.justice.gov/opa/pr/texas-woman-pleads-guilty-conspiracy-facilitate-adoptions-uganda-through-bribery-and-
fraud.
26
scheme to facilitate adoptions of Ugandan children through bribery of Ugandan officials and to defraud
U.S. adoptive parents and the U.S. Department of State.
Three individuals settled civil FCPA charges with the SEC in 2019.77 Among these individuals was
Timothy Leissner, the former chairman of Goldman Sachs in Southeast Asia, who settled charges relating
to his role in the 1Malaysia Development Berhad (“1MDB”) scandal, the ongoing investigation in Malaysia
stemming from accusations that Najib Razak, the former Prime Minster of Malaysia, and other government
officials illegally misappropriated $4.5 billion from 1MDB, a state-owned strategic development company.78
Leissner agreed to a permanent ban from the securities industry and payment of $44 million in
disgorgement. He pleaded guilty to criminal FCPA charges for the same conduct in 2018.
Four individuals were convicted at trial of FCPA violations.79 Following a three-week jury trial,
Mark Lambert, the former president of Transportation Logistics Inc., was convicted of four counts of
violating the FCPA, one count of conspiracy to violate the FCPA, two counts of wire fraud, and one count of
conspiracy to commit wire fraud.80 Lambert was convicted of participating in a scheme to bribe a Russian
official at JSC Techsnabexport, a subsidiary of Russia’s State Atomic Energy Corporation and the sole
supplier and exporter of Russian Federation uranium and uranium enrichment services to nuclear power
companies, in order to secure contracts. Following a two-week jury trial, as discussed further below,
Lawrence Hoskins, a British national, was convicted of, among other things, violating the FCPA.81 Hoskins
was found guilty in relation to a scheme to bribe government officials in various countries, including
Indonesia, in order to obtain government contracts. Following a two-week jury trial, Roger Boncy, the
chairman and CEO of an investment firm, and Joseph Baptiste, a member of the investment firm’s board
of directors, were convicted of one count of conspiracy to violate the FCPA and the Travel Act. Boncy and
77 See In the Matter of Sridhar Thiruvengadam, Exchange Act Release No. 86963 (Sept. 13, 2019), https://www.sec.gov/
litigation/admin/2019/34-86963.pdf; In the Matter of Westport Fuel Systems, Inc. and Nancy Gougarty, Exchange Act
Release No. 87138 (Sept. 27, 2019), https://www.sec.gov/litigation/admin/2019/34-87138.pdf; In the Matter of Tim Leissner,
Exchange Act Release No. 87750 (Dec. 16, 2019), https://www.sec.gov/litigation/admin/2019/34-87750.pdf. 78 See In the Matter of Tim Leissner, Exchange Act Release No. 87750 (Dec. 16, 2019), https://www.sec.gov/litigation/admin/
2019/34-87750.pdf; Callum Burroughs & Yusuf Khan, The Bizarre Story of 1MDB, the Goldman Sachs-Backed Malaysian
Fund That Turned Into One of the Biggest Scandals in Financial History (Aug. 9, 2019),
https://www.businessinsider.com/1mdb-timeline-the-goldman-sachs-backed-malaysian-wealth-fund-2018-12. 79 See Brian A. Benczkowski, Assistant Attorney General, Criminal Division, U.S. Dep’t of Justice, Remarks at the American
Conference Institute’s 36th International Conference on the Foreign Corrupt Practices Act (Dec. 4, 2019),
https://www.justice.gov/opa/speech/assistant-attorney-general-brian-benczkowski-delivers-remarks-american-
conference#pwkey=pw2. 80 See Press Release, Dep’t of Justice, Former President of Transportation Company Found Guilty of Violating the Foreign
Corrupt Practices Act and Other Crimes (Nov. 22, 2019), https://www.justice.gov/opa/pr/former-president-transportation-
company-found-guilty-violating-foreign-corrupt-practices-act. 81 See Press Release, Dep’t of Justice, Former Senior Alstom Executive Convicted at Trial of Violating the Foreign Corrupt
Practices Act, Money Laundering and Conspiracy (Nov. 8, 2019), https://www.justice.gov/opa/pr/former-senior-alstom-
executive-convicted-trial-violating-foreign-corrupt-practices-act-money.
27
Baptiste were convicted of conspiring to pay millions of dollars in bribes to Haitian officials in order to
develop a shipping port in Haiti.82
An FCPA trial against two individuals is scheduled to commence in 2020.83
Legal Developments Affecting Enforcement Tools
In 2019, significant legal developments affected the DOJ’s and the SEC’s tools for enforcing the FCPA and
resolving cases. First, in In re: Sealed Case, the U.S. Court of Appeals for the District of Columbia held that
a purely foreign bank’s choice to maintain correspondent accounts in the United States was sufficient for
the court to sustain personal jurisdiction. Second, in United States v. Hoskins, based on an agency
relationship—the first such case tried to verdict—a jury convicted a foreign national who did not work for a
U.S. company and had never visited the United States of violating the FCPA. Third, in Liu v. SEC, the U.S.
Supreme Court granted certiorari to review the question whether the SEC may obtain disgorgement in
judicial enforcement actions, such as those frequently used in enforcement actions under the FCPA. These
legal developments and their potential implications are discussed below.
In re: Sealed Case
On July 30, 2019, the U.S. Court of Appeals for the District of Columbia affirmed civil contempt orders by
the U.S. District Court for the District of Columbia against three Chinese banks for their failure to produce
documents in response to U.S. government subpoenas relating to an investigation of North Korea’s
financing of its nuclear weapons program.84 The D.C. Circuit concluded that there was personal jurisdiction
over all three banks because two of the banks consented to jurisdiction when they opened branches in the
United States and the third bank’s choice to maintain correspondent accounts in the United States was
sufficient to sustain jurisdiction. The Circuit further concluded that comity principles did not require that
the subpoenas be quashed because the district court exercised appropriate discretion in finding that the
comity concerns identified by the banks—including that compliance with the subpoenas would put the
banks in breach of Chinese law—were outweighed by the national security interests of the United States.
Now that the D.C. Circuit has affirmed the district court’s decision, the three Chinese banks must decide
whether to petition for en banc review or review by the U.S. Supreme Court, to comply with the subpoenas
and produce the documents, or to decline to produce the subpoenaed documents and risk court penalties
and potential action by the U.S. government for non-compliance. Notably, in the prior similar case of Nike
v. Wu, in the face of fines for non-compliance, six Chinese banks—all of which have U.S. branches—opted
82 See Press Release, Dep’t of Justice, Two Businessmen Convicted of International Bribery Offenses (June 20, 2019),
https://www.justice.gov/opa/pr/two-businessmen-convicted-international-bribery-offenses-0. 83 See U.S. v. Coburn et al., No. 2:19-CR-00120-KM (D.N.J. 2019). 84 See In re: Sealed Case, No. 19-5068 (D.C. Cir. Aug. 6, 2019); see also Client Memorandum, Paul, Weiss, Rifkind, Wharton &
Garrison LLP, D.C. Circuit Upholds Decision Requiring Three Chinese Banks to Produce Documents Located in China to the
U.S. Government (Aug. 12, 2019), https://www.paulweiss.com/media/3978814/12aug19-three-bank-subpoena.pdf.
28
to comply with the third-party subpoenas by making productions with the assistance of the Chinese
Ministry of Justice, rather than take an appeal to the Second Circuit.85
The D.C. Circuit decision likely will embolden the DOJ to seek bank records located in China and other
countries, even in the absence of a mutual legal assistance treaty or an unwillingness on the part of a foreign
government to provide legal assistance. Among other things, the opinion provides an expansive reading of
the scope of the U.S. government’s subpoena authority pursuant to 31 U.S.C. § 5318(k), extending such
authority in some circumstances to include overseas records related to funds transfers that did not pass
through a U.S. correspondent account.86
An articulated goal of the DOJ’s China Initiative is “to improve Chinese responses to requests under the
Mutual Legal Assistance Agreement (‘MLAA’) with the United States.”87 It remains to be seen whether the
district court’s contempt order will incentivize China to become more responsive to the MLAA process. If,
however, no further review is obtained and the three Chinese banks comply with the subpoenas, the Court
of Appeals’ decision will have precedential effect in the Circuit, a commonly-used venue for the Money
Laundering and Asset Recovery Section of the DOJ’s Criminal Division. The Circuit’s decision may lead to
the DOJ’s use of compulsory process as a workaround in lieu of using the U.S.-China MLAA.
United States v. Hoskins
On November 8, 2019, a jury in the District of Connecticut found Hoskins, a British national and former
executive of Alstom S.A., a French power and rail transportation company, guilty of participating in a
scheme to make improper payments to Indonesian officials in violation of the FCPA, as well as three counts
of money laundering and two counts of conspiracy.88 The U.S. government’s prosecution of Hoskins led to
a seminal decision by the Second Circuit that reined in the FCPA’s extraterritorial reach over foreign
nationals who do not engage in acts on American soil, which held that such individuals cannot be directly
85 See Nike, Inc. v. Wu, 349 F. Supp. 3d 346 (S.D.N.Y. 2018); Letter addressed to Magistrate Judge Debra C. Freeman from David
G. Hille re: the Banks’ Production of Documents in Response to Subpoenas Issued by Plaintiff-Assignee Next Investments and
in Accordance with Judge McMahon’s November 19, 2018 Order, Nike, Inc. v. Wu, No. 1:13-CV-08012, Dkt. 184 (S.D.N.Y. Dec.
17, 2018). 86 Because the third Chinese bank did not have a branch in the United States, the subpoena issued to that bank was made
pursuant to 31 U.S.C. § 5318(k)(3)(A), a USA Patriot Act provision that authorizes the Attorney General and the Treasury
Secretary to issue a “subpoena to any foreign bank that maintains a correspondent account in the United States and request
records related to such correspondent account, including records maintained outside of the United States relating to the
deposit of funds into the foreign bank.” 87 See Attorney General Jeff Session[s]’s China Initiative Fact Sheet, U.S. Dep’t of Justice (Nov. 1, 2018),
https://www.justice.gov/opa/speech/file/1107256/download. 88 See Press Release, Dep’t of Justice, Former Senior Alstom Executive Convicted at Trial of Violating the Foreign Corrupt
Practices Act, Money Laundering and Conspiracy (Nov. 8, 2019), https://www.justice.gov/opa/pr/former-senior-alstom-
executive-convicted-trial-violating-foreign-corrupt-practices-act-money; see also Client Memorandum, Paul, Weiss, Rifkind,
Wharton & Garrison LLP, Jury Convicts Foreign National of FCPA Violations Under Agency Theory (Nov. 21, 2019),
https://www.paulweiss.com/media/3979161/21nov19-fcpa-hoskins-trial-alert.pdf.
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liable under the FCPA based on secondary liability theories, such as conspiracy and aiding and abetting.89
The Second Circuit, however, found that Hoskins—even if he was never present in the United States—could
have acted as an agent of an issuer or a domestic concern and therefore could have conspired with
employees of a U.S. subsidiary or other foreign nationals who conducted acts while in the United States.
The Second Circuit accordingly allowed the government to proceed to trial against Hoskins under the theory
that Hoskins acted as an agent of Alstom Power, Alstom’s U.S. subsidiary, in connection with the bribery
scheme.
During the two-week trial, the DOJ portrayed Hoskins as playing a vital role as an agent of Alstom Power
in negotiating contracts and choosing the consultants to carry out the bribe payments. The DOJ contended
that Alstom’s formal corporate structure, which showed Hoskins working for the French parent company,
did not by itself demonstrate which employees were in control of the scheme.90 Instead, the DOJ relied on
testimony from former employees of Alstom Power, as well as Hoskins’s communications with employees
at Alstom Power, to prove that Hoskins acted as an agent of the U.S. subsidiary. The DOJ also argued that
the evidence at trial demonstrated that Alstom Power had final authority over compensation for the
consultants that paid the bribes and that Hoskins negotiated with the consultants on behalf of Alstom
Power.
In instructing the jury regarding the meaning of agency, the court relied on the traditional definition, as
cited in the Second Restatement of Agency and Connecticut common law, instructing that to find that
Hoskins acted as an agent of Alstom Power, the jurors needed to conclude that “there must be, one, a
manifestation by the principal that the agent will act for it; two, acceptance by the agent of the undertaking;
and, three, an understanding between the agent and the principal that the principal will be in control of the
undertaking.”91 Although Hoskins was not an issuer, a domestic concern, or a person whose own conduct
in U.S. territory brought him within the ambit of the FCPA, the jury found him liable as an agent of Alstom
Power, which was a domestic concern.
Hoskins has appealed the jury’s verdict, urging the district court to vacate his convictions or grant a new
trial on the grounds that the evidence presented at trial was not sufficient to show that he was an agent of
Alstom Power.92
Following the Hoskins trial, AAG Benczkowski clarified that the DOJ “is not looking to stretch the bounds
of agency principles beyond recognition” and will not automatically seek to impose agency liability on
89 U.S. v. Hoskins, 902 F.3d 69, 97-98 (2d Cir. 2018); see Client Memorandum, Paul, Weiss, Rifkind, Wharton & Garrison LLP,
The Second Circuit Rejects FCPA Liability for Foreign Persons Under Accessory Liability Theories (Aug. 27, 2018),
https://www.paulweiss.com/media/3977977/27aug18-fcpa-us-v-hoskins.pdf. 90 See Transcript of Jury Trial at 1339, U.S. v. Hoskins, No. 3:12-CR-238 (D. Conn. Oct. 28, 2019). 91 Id. at 1246-47. 92 See Mem. of Law in Support of Rule 29(c) Mot. for a Judgment of Acquittal and Rule 33 Mot. for a New Trial, U.S. v. Hoskins,
No. 12-CR-238 (Nov. 29, 2019).
30
parent companies for FCPA violations by subsidiaries, joint ventures, and affiliates.93 AAG Benczkowski
explained that the DOJ instead will favor prosecution in cases where corporate structures are used to try to
shield a parent or an individual from liability. Nevertheless, Hoskins’s trial and conviction suggest that,
while the government may not be able to rely on conspiracy or aiding and abetting theories of liability to
extend the reach of the FCPA against non-U.S. persons or companies, it may still rely on an agency theory
for such a purpose.
Notably, however, in United States v. Firtash, the U.S. District Court for the Northern District of Illinois
declined to follow the Second Circuit’s Hoskins decision and denied the defendant’s motion to dismiss on
the basis that the indictment failed to allege that he was an agent of a domestic concern or a qualified foreign
national.94 Although the decision has yet to be appealed, this may create a circuit split should the Seventh
Circuit affirm the decision.
Liu v. SEC
In 2017, in Kokesh v. SEC, the Supreme Court characterized disgorgement as a “penalty” rather than an
equitable remedy.95 In that decision, the Supreme Court expressly flagged, but did not address, whether
the SEC may obtain disgorgement from a court for securities law violations. On November 1, 2019, the
Supreme Court granted certiorari in Liu v. SEC, to address this important question, agreeing to consider
whether the SEC has authority to collect disgorgement pursuant to its statutory authority to obtain
equitable relief.96 The Supreme Court’s ruling, which is expected in 2020, could have significant
implications for the scope of remedies available to the SEC in FCPA enforcement actions, among other
cases.
In Liu, an SEC civil enforcement action alleging violations of the federal securities laws, the U.S. District
Court for the Central District of California granted summary judgment to the SEC and ordered petitioners
to disgorge over $26 million.97 On appeal to the Ninth Circuit, petitioners challenged the disgorgement
order. Citing Kokesh, petitioners argued that the SEC does not have the authority to seek
disgorgement.98 The Ninth Circuit affirmed the district court’s disgorgement order, explaining that it was
93 See Brian A. Benczkowski, Assistant Attorney General, Criminal Division, U.S. Dep’t of Justice, Remarks at the American
Conference Institute’s 36th International Conference on the Foreign Corrupt Practices Act (Dec. 4, 2019),
https://www.justice.gov/opa/speech/assistant-attorney-general-brian-benczkowski-delivers-remarks-american-
conference#pwkey=pw2. 94 392 F. Supp. 3d 872 (N.D. Ill. 2019). 95 See Client Memorandum, Paul, Weiss, Rifkind, Wharton & Garrison LLP, U.S. Supreme Court Holds That Five-Year Statute of
Limitations Applies to Claims for Disgorgement Brought by the SEC (June 6, 2017), https://www.paulweiss.com/media/
3977137/6june17-kokesh.pdf. 96 See Petition for Writ of Certiorari, Liu v. SEC, No. 18-1501 (U.S. May 31, 2019); see also Client Memorandum, Paul, Weiss,
Rifkind, Wharton & Garrison LLP, Supreme Court to Consider if the SEC May Collect Disgorgement in Civil Enforcement
Proceedings (Nov. 4, 2019), https://www.paulweiss.com/media/3979109/4nov19-liu-v-sec.pdf. 97 Petition for Writ of Certiorari at 4, Liu v. SEC, No. 18-1501 (U.S. May 31, 2019). 98 See SEC v. Liu, 754 F. App’x 505, 509 (9th Cir. 2018), cert. granted sub nom. Liu v. SEC, No. 18-1501, 2019 WL 5659111 (U.S.
Nov. 1, 2019).
31
bound by Circuit precedent because the Kokesh Court declined to address whether the SEC was authorized
to seek disgorgement as a remedy, so Kokesh was not “clearly irreconcilable” with the Circuit’s
“longstanding precedent on this subject.”
Petitioners filed a petition for a writ for certiorari, asking the Supreme Court to review the question
“[w]hether the Securities and Exchange Commission may seek and obtain disgorgement from a court as
‘equitable relief’ for a securities law violation even though this Court has determined that such disgorgement
is a penalty.”
Shortly after the Supreme Court granted certiorari in Liu, the U.S. House of Representatives passed
legislation that would explicitly authorize the SEC to seek disgorgement and extend the statute of
limitations on disgorgement claims to fourteen years.99 The bipartisan bill has been approved by the House
and referred to the U.S. Senate. If enacted, the bill effectively will overturn Kokesh and moot Liu.
Resolution of this issue will have significant implications for the SEC, which has relied on disgorgement as
a powerful tool in judicial and administrative enforcement actions, including in FCPA settlements. In 2019
alone, the SEC collected approximately $3.2 billion in disgorgement across all cases, as compared with
$1.1 billion in civil monetary penalties.100 The SEC estimates that the Kokesh ruling has caused the
Commission to forgo approximately $1.1 billion in disgorgement.101
Multi-Jurisdictional Coordination
As in prior years, senior officials in U.S. enforcement agencies affirmed publicly their agencies’
commitments to coordinating with foreign authorities, including in transnational bribery cases. For
example, then-Deputy Attorney General Rod Rosenstein explained that “international cooperation is
essential to prohibit corruption by multinational corporations.”102
Consistent with this commitment, U.S. authorities coordinated with and leveraged the resources of their
foreign counterparts, as demonstrated by the resolutions with MTS, TFMC, and SHI. However, many of
these resolutions closed out investigations started prior to 2015, with one even dating back to 2011. Notably,
there was a substantial decline in the penalties assessed in 2019 by foreign authorities in connection with
U.S. corporate resolutions, with foreign authorities assessing $214.3 million in 2019 as compared with $975
million–$3.7 billion in 2016–2018. Although we caution against reading too much into this data, we are
monitoring whether the decline in foreign penalties may signal a broader decline in cooperation between
99 H.R. 4344, 116th Cong. (2019) (as passed by House, Nov. 18, 2019). 100 See U.S. Securities and Exchange Commission, 2019 Annual Report 16 (2019), https://www.sec.gov/files/enforcement-annual-
report-2019.pdf. 101 Id. at 21. 102 See Rod J. Rosenstein, Deputy Att’y Gen., Dep’t of Justice, Keynote Address on FCPA Enforcement Developments (Mar. 7,
2019), https://www.justice.gov/opa/speech/deputy-attorney-general-rod-j-rosenstein-delivers-keynote-address-fcpa-
enforcement.
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U.S. and foreign authorities. Indeed, in September 2019, SEC Chairman Clayton remarked that he has “not
seen meaningful improvement” in international cooperation regarding anti-corruption efforts.103
Foreign Jurisdictions Investigating and Prosecuting Corruption
In addition to U.S.-led enforcement, other jurisdictions took significant strides to investigate and prosecute
corrupt actors. Authorities in numerous countries announced investigations and prosecutions of allegedly
corrupt officials and a startling number of current and former government officials, including former heads
of state, were convicted and sentenced in connection with corruption charges. Foreign authorities in several
jurisdictions also continued to pursue corporate enforcement actions. In addition, a number of foreign
jurisdictions acted to enhance their anti-corruption laws.
Africa
In Angola, Augusto Da Silva Tomas, Angola’s former transport minister, was sentenced to fourteen years in prison after being found guilty of corruption, embezzlement, and money laundering.104 Asia
In China, Meng Hongwei, the former chief of Interpol, pleaded guilty to receiving bribes in exchange for
favors.105 Wang Xiaoguang, a former provincial vice-governor in southern China, pleaded guilty to bribery,
embezzlement, and insider trading charges, and was sentenced to twenty years in jail and fined $26 million,
a record in China for bribery and embezzlement charges.106 Liu Shiyu, the former head of the China
Securities Regulatory Commission, was removed from his position as deputy party chief of a Chinese supply
cooperative after a corruption probe. Due to his cooperation with authorities, he will not lose his party
membership or face trial.107 According to news reports, the Central Commission for Discipline Inspection,
103 See Jay Clayton, Chairman, Sec. Exch. Comm’n, Remarks to the Economic Club of New York (Sept. 9, 2019),
https://www.sec.gov/news/speech/speech-clayton-2019-09-09. 104 See AFP, Angola Ex-Transport Minister Jailed for 14 Years for Graft, MACAU BUSINESS (Aug. 16, 2019),
https://www.macaubusiness.com/angola-ex-transport-minister-jailed-for-14-years-for-graft/. 105 See Philip Wen, Former Interpol Chief Admits to Taking Bribes, Chinese Court Says, WALL ST. J. (June 20, 2019),
https://www.wsj.com/articles/former-interpol-chief-admits-to-taking-bribes-chinese-court-says-11561024497. 106 See William Zheng, Chinese Ex-Official Who Collected Rare Orchids and Mao-tai Liquor Jailed for 20 Years for Corruption,
SOUTH CHINA MORNING POST (Apr. 23, 2019), https://www.scmp.com/news/china/politics/article/3007384/chinese-ex-
official-who-collected-rare-orchids-and-mao-tai. 107 See Yilei Sun & Chen Aizhu, China Removes Former Head of Securities Regulator From Government Post After Corruption
Probe, REUTERS (Oct. 4, 2019), https://www.reuters.com/article/us-china-corruption/china-removes-former-head-of-
securities-regulator-from-government-post-after-corruption-probe-idUSKBN1WJ1IN; Jun Mai, The Curious Corruption Case
of China’s Former Securities Chief Liu Shiyu and His Lenient Treatment, SOUTH CHINA MORNING POST (Oct. 21, 2019),
https://www.scmp.com/news/china/politics/article/3033774/curious-corruption-case-chinas-former-securities-chief-liu.
33
the Communist Party’s top anti-graft agency, is investigating Hu Huaibang, former chairman of China
Development Bank, for allegedly channeling bribes to a party official on behalf of an energy company.108
In Hong Kong, Catherine Leung Kar-cheung, a former JPMorgan executive, pleaded not guilty to bribery
charges as part of the “sons and daughters” bribery case.109
In Japan, Satoshi Uchida, a former executive of Mitsubishi Hitachi Power Systems Ltd., was sentenced to
an 18-month prison term, suspended for three years, after being found guilty of bribery of a Thai official.110
Separately, Tsukasa Akimoto, a former member of Japan’s Parliament and the governing Liberal
Democratic Party, was arrested on suspicion of taking bribes from 500.com Ltd., a New York listed, China-
based online betting company.111 Akimoto allegedly accepted approximately $27,500 in cash as well as
other gifts.
Najib Razak, the former prime minister of Malaysia, was charged with three counts of money laundering
in connection with the 1MDB scandal. In November, the High Court found that the prosecution had
established its case against Razak on charges of abuse of power, breach of trust and money laundering. The
trial is still ongoing.112 Separately, Malaysia’s Attorney General filed criminal charges against Richard John
Gnodde, CEO of Goldman Sachs International and former vice chairman of Goldman Sachs, and
John Michael Evans, former vice chairman of Goldman Sachs and current president of Alibaba Group, for
their roles as directors of Goldman Sachs during the 1MDB scandal.113
In Pakistan, the National Accountability Bureau arrested Miftah Ismail, Pakistan’s former finance
minister, and Sheik Imran ul-Haque, the former managing director of Pakistan State Oil, for corruption.114
108 See Zhou Xin, China’s Ex-‘Super Bank’ Chief Faces Probe as Beijing’s Financial Sector Corruption Crackdown Continues,
SOUTH CHINA MORNING POST (July 31, 2019), https://www.scmp.com/economy/china-economy/article/3020826/chinas-ex-
super-bank-chief-faces-probe-beijings-financial. 109 See Joanne Chu, Former JPMorgan Banker Pleads Not Guilty in ‘Sons and Daughters’ Bribery Case, WALL ST. J.
(July 18, 2019), https://www.wsj.com/articles/former-jpmorgan-banker-pleads-not-guilty-in-sons-and-daughtersbribery-case-
11563443700?ns=prod/accounts-wsj. 110 See Kyodo News & Online Reporters, Japanese Exec Sentenced for Bribing Thai Official, BANGKOK POST (Sept. 13, 2019),
https://www.bangkokpost.com/thailand/general/1749469/japanese-exec-sentenced-for-bribing-thai-official. 111 See Naomi Tajitsu, David Dolan & Daniel Leussink, Explainer: Bribery Scandal Casts Shadow on Japan’s Big Casino Gamble,
REUTERS (Dec. 26, 2019), https://www.reuters.com/article/us-japan-casino-corruption-explainer/explainer-bribery-scandal-
casts-shadow-on-japans-big-casino-gamble-idUSKBN1YU0C8. 112 See Eileen Ng, Malaysian Ex-PM Najib Ordered to Enter Defense in 1MDB Case, AP NEWS (Nov. 11, 2019),
https://apnews.com/9af8bc7eda82475c96ca18ed85640918. 113 See Sui-Lee Wee, Malaysia Charges Goldman Sachs Executives in 1MDB Scandal, N.Y. TIMES (Aug. 9, 2019),
https://www.nytimes.com/2019/08/09/business/1mdb-goldman-sachs-malaysia.html. 114 See Ismail Dilawar, Pakistan Anti-Graft Agency Arrests Ex-Finance Minister Ismail, BLOOMBERG (Aug. 7, 2019),
https://www.bloomberg.com/news/articles/2019-08-07/pakistan-anti-graft-agency-arrests-ex-finance-minister-ismail-
jz15frut?srnd=markets-vp; Aamir Saeed, Pakistan’s Ex-Finance Minister Held Over $16bn Qatar Gas Deal, ARAB NEWS
(Aug. 7, 2019), https://www.arabnews.com/node/1537121/world.
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The Supreme Court of South Korea in August set aside and ordered a retrial for part of the conviction of
Park Geun-hye, the former president of South Korea who in 2018 was convicted of, among other things,
bribery, extortion, and abuse of power, and sentenced to 25 years in prison. The Supreme Court found that
a separate verdict should have been reached on the bribery allegations and sent the case to a lower court to
reach a new verdict, without instructions to consider whether Park might be innocent.115 Separately,
Samsung heir Lee Jae-yong is being re-tried on bribery charges related to payments to Park after the
Supreme Court found that the lower court’s interpretation of what constituted bribes by Samsung to Park
was too narrow. The trial is ongoing, with a verdict expected in 2020.116
Europe and the Middle East
In Belgium, the foreign minister, Didier Reynders, has been accused of trying to cover up an investigation
into allegedly illicit payments that he received from construction of an embassy in Kinshasa, an arms deal
with Kazakhstan, and the release of frozen funds to Libya.117
The Supreme Court of Appeals in France has ordered that former president Nicolas Sarkozy must stand
trial on corruption charges.118 A trial date has been set for October 2020.119 Lamine Diack, a former
president of the International Association of Athletics Federations, was ordered to stand trial in France in
January 2020 on charges of corruption and money laundering.120 Tsunekazu Takeda, the president of
Japan’s Olympic Committee and chairman of the International Olympic Committee’s marketing
commission, was indicted in France on charges related to Tokyo’s bid to host the 2020 Summer Olympics.121
115 See S Korea Ex-Leader Park and Samsung Heir Lee Face Bribery Retrials, BBC (Aug. 29, 2019), https://www.bbc.com/news/
world-asia-49507401. 116 See id.; Heekyong Yang, Judge Asks Samsung Heir to Be Humble at Bribery Trial, REUTERS (Oct. 24, 2019),
https://www.reuters.com/article/us-southkorea-corruption-samsung/judge-asks-samsung-heir-to-be-humble-at-bribery-trial-
idUSKBN1X404K. 117 See Robin Emmott, Belgium’s Pick for EU Commission Faces New Graft Accusation, REUTERS (Oct. 1, 2019),
https://www.reuters.com/article/us-eu-jobs-belgium/belgiums-pick-for-eu-commission-faces-new-graft-accusation-
idUSKBN1WG4G9. 118 See Emmanuel Jarry & Richard Lough, France’s Sarkozy Loses Bid to Avoid Corruption Trial, REUTERS (June 19, 2019),
https://af.reuters.com/article/worldNews/idAFKCN1TK1ND; Andrew Heavens, Top French Court Rejects Bid by Sarkozy to
Avoid Trial Over 2012 Campaign, REUTERS (Oct. 1, 2019), https://www.reuters.com/article/us-france-sarkozy/top-french-
court-rejects-bid-by-sarkozy-to-avoid-trial-over-2012-campaign-idUSKBN1WG3U7. 119 See Merrit Kennedy, Former French President Sarkozy to Face Trial for Alleged Graft, NPR (Jan. 8, 2020),
https://www.npr.org/2020/01/08/794628821/former-french-president-sarkozy-to-face-trial-for-alleged-graft. 120 See Sean Ingle, Lamine Diack to Stand Trial for Money Laundering and Corruption, Guardian (June 24, 2019),
https://www.theguardian.com/sport/2019/jun/24/lamine-diack-trial-money-laundering-corruption-iaaf; AFP, Date Set for
First IAAF Corruption Trial, DAILY NATION (Oct. 29, 2019), https://mobile.nation.co.ke/sports/athletics/Date-set-for-first-
IAAF-corruption-trial/3112514-5328382-3p0ikoz/index.html. 121 See Ben Dooley, Japan’s Olympic Chief to Step Down Amid Corruption Investigation, N.Y. TIMES (Mar. 19, 2019),
https://www.nytimes.com/2019/03/19/business/japan-olympics-bribery-corruption.html; Tariq Panja & Hiroko Tabuchi,
Japan’s Olympics Chief Faces Corruption Charges in France, N.Y. TIMES (Jan. 11, 2019), https://www.nytimes.com/
2019/01/11/world/europe/japan-olympics-corruption-tsunekazu-takeda.html.
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In addition, authorities have opened a corruption investigation into the circumstances resulting in Qatar
being awarded the 2022 World Cup.122
In Italy, the Parliament approved a bill aimed at combating corruption in Italy’s public sector, which came
into force in January.123 The bill expands the definition of corruption-related crimes, clarifies the statute of
limitations for criminal actions, imposes additional penalties on political parties involved in corruption-
related crimes, and requires that political parties disclose the curricula vitae and criminal background of
candidates within two weeks prior to electoral contests of any type in all municipalities with at least 15,000
inhabitants.
Royal Dutch Shell is currently standing trial, alongside Eni, an Italian energy company, on bribery charges
relating to a $1.3 billion oil deal in Nigeria. Italian prosecutors also are investigating obstruction of justice
charges against Eni.124
In Romania, Laura Codruta Kovesi, the former chief of Romania’s anti-corruption agency, was indicted
on bribery, abuse of office, and false testimony charges.125 Romania has lifted the travel ban that it
previously placed on Kovesi, and she has been appointed to lead the European Public Prosecutor’s Office.126
Switzerland filed its first indictment in the Petrobras-Odebrecht investigation.127 Swiss prosecutors
indicted Beny Steinmetz, an Israeli businessman with extensive mining interests, and two of his associates
122 See Tariq Panja, France to Investigate How Qatar Got the World Cup, N.Y. Times (Dec. 11, 2019), https://www.nytimes.com/
2019/12/11/sports/soccer/qatar-world-cup-michel-platini.html. 123 See Italy: New Anti-Corruption Legislation Comes Into Force, U.S. LIB. OF CONG. (Feb. 26, 2019), https://www.loc.gov/law/
foreign-news/article/italy-new-anti-corruption-legislation-comes-into-force/. 124 See Stanley Reed, Shell May Face Charges in Netherlands Tied to Nigerian Oil Deal, N.Y. TIMES (Mar. 1, 2019),
https://www.nytimes.com/2019/03/01/business/shell-netherlands-nigeria-charges.html; Emilio Parodi, Italy Widens Probe
Into Alleged Obstruction in Nigeria Graft Case, REUTERS (July 4, 2019), https://www.reuters.com/article/eni-shell-nigeria-
obstruction/italy-widens-probe-into-alleged-obstruction-in-nigeria-graft-case-idUSL4N24230K. 125 See Luiza Ilie & Jan Strupczewski, Romania Files Charges Against Former Chief Anti-Corruption Prosecutor, REUTERS (Mar.
29, 2019), https://www.reuters.com/article/us-romania-corruption/romania-files-charges-against-former-chief-anti-
corruption-prosecutor-idUSKCN1RA1GD; Kit Gillet, Leading Prosecutor for E.U. Anticorruption Job Is Barred From Leaving
Romania, N.Y. TIMES (Mar. 29, 2019), https://www.nytimes.com/2019/03/29/world/europe/romania-corruption-proescutor-
eu.html. 126 See Romania Lifts Travel Ban on Former Anti-Corruption Chief, DW (Apr. 4, 2019), https://www.dw.com/en/romania-lifts-
travel-ban-on-former-anti-corruption-chief/a-48193119; Luiza Ilie, ‘Great Expectations’, But EU’s First Fraud Prosecutor
Undaunted by Challenge, REUTERS (Oct. 28, 2019), https://www.reuters.com/article/us-eu-corruption/great-expectations-
but-eus-first-fraud-prosecutor-undaunted-by-challenge-idUSKBN1X717Z. 127 See Hugo Miller, First Petrobras Indictment Filed in Long-Running Swiss Probe, BLOOMBERG (Oct. 22, 2019),
https://www.bloomberg.com/news/articles/2019-10-22/first-petrobras-indictment-filed-in-long-running-swiss-probe.
36
on bribery charges related to mining rights in Guinea.128 Separately, prosecutors settled charges of
corruption against commodities trading house Gunvor Group Ltd. for approximately $95 million.129
In the Ukraine, former President Petro Poroshenko announced the launch of a special court to try
corruption cases, along with the appointment of 38 new judges to that court.130 The High Anti-Corruption
Court started work in early September.131
In the United Kingdom, the Serious Fraud Office (“SFO”) published a five-page document on Corporate
Cooperation Guidance, describing steps a company can take if it wants to cooperate with prosecutors in an
investigation.132
David Lufkin, a former Petrofac executive, pleaded guilty to eleven counts of bribery related to payments
Petrofac made to win contracts in Iraq and Saudi Arabia worth more than $4 billion.133 Basil Al Jarah, a
former partner at Unaoil Group in Iraq, pleaded guilty to five counts of corruption.134 Three former
executives of metalworking technology company Sarclad Ltd. were found not guilty of conspiring to commit
corruption offenses.135 The SFO fined shipping and logistics company F.H. Bertling Ltd. $1.1 million for
alleged bribe payments made in Angola.136 The SFO also fined a British subsidiary of Alstom S.A.
128 See Stephanie Nebehay, Geneva Prosecutors Indict Billionaire Steinmetz in Guinea Corruption Case, Reuters (Aug. 12, 2019),
https://www.reuters.com/article/us-swiss-guinea-bsr/geneva-prosecutors-indict-billionaire-steinmetz-in-guinea-corruption-
case-idUSKCN1V21HI. 129 See Julia Payne, Gunvor Must Pay $95 million for Congo Oil Corruption: Swiss Prosecutors, Reuters (Oct. 17, 2019),
https://www.reuters.com/article/us-gunvor-grp-congo-corruption/swiss-orders-gunvor-to-pay-95-million-in-congo-oil-
corruption-case-idUSKBN1WW0Z9. 130 See Andrei Makhovsky & Matthias Williams, Ukraine President Rolls Out Special Court to Try Corruption Cases, REUTERS
(Apr. 11, 2019), https://www.reuters.com/article/us-ukraine-election-imf/ukraine-president-rolls-out-special-court-to-try-
corruption-cases-idUSKCN1RN1SQ. 131 See Ukraine’s Long Awaited Anti-Corruption Court Starts Work, KYIV POST (Sept. 6, 2019), https://www.kyivpost.com/
ukraine-politics/bne-intellinews-ukraines-long-awaited-anti-corruption-court-starts-work.html?cn-reloaded=1. 132 See Serious Fraud Office, Corporate Co-operation Guidance (Aug. 16, 2019), https://www.sfo.gov.uk/download/corporate-co-
operation-guidance/?mod=article_inline; see also Dylan Tokar, U.K. Fraud Agency Strikes New Tone With Cooperation
Guidance, WALL ST. J. (Aug. 8, 2019), https://www.wsj.com/articles/u-k-fraud-agency-strikes-new-tone-with-cooperation-
guidance-11565128755. 133 See Former Petrofac Executive Pleads Guilty to Bribery, FINANCIAL TIMES (Feb. 7, 2019), https://www.ft.com/content/
11b156e2-2ab7-11e9-88a4-c32129756dd8. 134 See Franz Wild, Oil Executive Pleads Guilty in U.K.’s Iraqi Pipeline Bribes Case, BLOOMBERG (July 19, 2019),
https://www.bloomberg.com/news/articles/2019-07-19/oil-executive-pleads-guilty-in-u-k-s-iraqi-pipeline-bribes-case. 135 See Dylan Tokar, Sarclad Settlement Questioned Following Executives’ Acquittal, WALL ST. J. (July 16, 2019),
https://www.wsj.com/articles/sarclad-settlement-questioned-following-executives-acquittal-11563316565. 136 See Press Release, Serious Fraud Office, FH Bertling Sentenced for $20m Angolan Bribery Scheme (June 3, 2019),
https://www.sfo.gov.uk/2019/06/03/fh-bertling-sentenced-for-20m-angolan-bribery-scheme/; see also Kristin Broughton,
F.H. Bertling Fined $1 Million in Angola Bribery Case, WALL ST. J. (June 3, 2019), https://www.wsj.com/articles/f-h-bertling-
fined-1-million-in-angola-bribery-case-11559601111.
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$21.2 million after the company was convicted of paying bribes to secure a transportation contract in
Tunisia.137
The SFO concluded an investigation, which began in 2014, of GlaxoSmithKline PLC into allegations of
bribery of officials in China, without bringing any charges.138 In addition, the SFO closed an investigation,
which began in 2013, of Rolls-Royce PLC into allegations that the company falsified accounts to hide the
illegal use of local middlemen and paid bribes to win engine and other deals in China, Indonesia, Russia,
and Thailand.
In Israel, Prime Minister Benjamin Netanyahu was indicted and charged with bribery, fraud, and breach
of trust in November in connection with three corruption probes.139
Latin America
In Brazil, there were several developments related to the Operation Lava Jato corruption scandal. A series
of leaked private messages among law enforcement officials called into question the integrity of
prosecutions relating to Operation Lava Jato, as the messages suggest that a prominent judge involved in
hearing cases in the scandal was actively consulting with federal prosecutors and advising them on
strategy.140 Also, authorities arrested former President Michael Temer in connection with bribery
allegations related to the investigation.141 He subsequently was cleared of separate charges that he tried to
obstruct investigations by the Public Prosecutor’s Office relating to Lava Jato.142 And Brazil’s Supreme
Court overturned the conviction of Aldemir Bendine, the former chief executive of Petrobras, finding he
should have been permitted to make a closing argument following accusations against him from plea-
bargain testimony.143 This marks the first time a conviction has been annulled in Lava Jato. In addition,
the Board of Braskem S.A., a Brazilian petrochemical company, entered into a leniency agreement with
137 See Kristin Broughton & Olivia Bugault, Alston Unit Ordered to Pay $21 Million in Tunisia Corruption Case, WALL ST. J.
(Nov. 25, 2019), https://www.wsj.com/articles/u-k-s-serious-fraud-office-orders-alstom-unit-to-pay-21-million-in-tunisia-
corruption-case-11574711300. 138 See Barney Thompson, SFO Ends Investigations Into Rolls-Royce and GSK, FINANCIAL TIMES (Feb. 22, 2019),
https://www.ft.com/content/4c931be4-3695-11e9-bb0c-42459962a812; Press Release, Serious Fraud Office, SFO Closes
GlaxoSmithKline Investigation and Investigation Into Rolls-Royce Individuals (Feb. 22, 2019),
https://www.sfo.gov.uk/2019/02/22/sfo-closes-glaxosmithkline-investigation-and-investigation-into-rolls-royce-individuals/. 139 See Felicia Schwartz & Dov Lieber, Israel’s Netanyahu Is Indicted on Bribery and Fraud Charges, WALL ST. J. (Nov. 21, 2019),
https://www.wsj.com/articles/prime-minister-netanyahu-indicted-on-bribery-fraud-breach-of-trust-charges-
11574353669?mod=e2tw. 140 See Ernesto Londoño & Letícia Casado, Leaked Messages Raise Fairness Questions in Brazil Corruption Inquiry, N.Y. TIMES
(June 10, 2019), https://www.nytimes.com/2019/06/10/world/americas/brazil-car-wash-lava-jato.html. 141 See Ernesto Londoño & Letícia Casado, Former President Michael Temer of Brazil Is Arrested in Bribery Probe, N.Y. TIMES
(Mar. 21, 2019), https://www.nytimes.com/2019/03/21/world/americas/michel-temer-arrested-prisao.html. 142 See Arkady Petrov, Judge Clears Ex-President Temer in Case Linked to Joesley Batista Recording, RIO TIMES (Oct. 17, 2019),
https://riotimesonline.com/brazil-news/brazil/politics-brazil/judge-clears-ex-president-temer-in-case-linked-to-joesley-
batistas-recording/. 143 See Ricardo Brito, Brazil ‘Car Wash’ Corruption Probe Facing ‘Worst Moment’ as Establishment Fights Back, Reuters
(Sept. 4, 2019), https://www.reuters.com/article/us-brazil-corruption-analysis/brazil-car-wash-corruption-probe-facing-
worst-moment-as-establishment-fights-back-idUSKCN1VP2SR.
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Brazil’s comptroller general’s office and the government’s solicitor general as a result of the Lava Jato
investigation and inquiries into payments to Petrobras.144 Separately, SBM Offshore N.V., a Dutch marine
engineering company, reached a settlement in a corruption investigation related to bribes of officials at
Petrobras.145
Sergio Cabral, the former governor of Rio de Janeiro, testified before a Brazilian judge that he approved a
$2 million payment to Lamine Diack, the former president of the International Association of Athletics
Federations, in exchange for votes so the city would be chosen to host the 2016 Olympics.146 Cabral was
sentenced to 33 years in prison for this conduct.147
Odebrecht will pay $50 million in charitable contributions to resolve bribery allegations under a deal
reached with the Inter-American Development Bank.148
Nayib Bukele, the president of El Salvador, launched an anti-corruption commission, the International
Commission Against Impunity in El Salvador.149
In Guatemala, the International Commission Against Impunity in Guatemala, a U.N. commission that
fought political corruption, left the country in September after its mandate expired, reportedly sparking
fear among judges and Guatemalan citizens that the country will take a step back in its anti-corruption
efforts.150 Guatemala’s Constitutional Court issued an injunction stopping a probe into whether the
International Commission Against Impunity had committed illegal or arbitrary acts.151
144 See Aluísio Alves, Braskem Board Approves Leniency Deal With Brazil’s Authorities, Reuters (May 27, 2019),
https://www.reuters.com/article/braskem-settlement-idCNE4N21D005. 145 See SBM Offshore Confirms Formal Closure of Brazil Legacy Case, GLOBE NEWS WIRE (Oct. 9, 2019),
https://www.globenewswire.com/news-release/2019/10/09/1927066/0/en/SBM-Offshore-confirms-formal-closure-of-Brazil-
legacy-case.html. 146 See Rodrigo Viga Gaier, Former Rio de Janeiro Governor Tells Judge He Paid $2 Million Bribe to Host 2016 Olympics,
Reuters (July 4, 2019), https://www.reuters.com/article/us-brazil-corruption-olympics/former-rio-de-janeiro-governor-tells-
judge-he-paid-2-million-bribe-to-host-2016-olympics-idUSKCN1U0029. 147 See Marcelo Gomes, Sergio Cabral Is Convicted for the 12th Time and Is Sentenced to 267 Years in Prison; Judge Sees
‘Fanciful’ Version, GLOBONEWS (Oct. 10, 2019), https://g1.globo.com/rj/rio-de-janeiro/noticia/2019/10/10/sergio-cabral-e-
condenado-a-mais-33-anos-de-prisao.ghtml. 148 See Dylan Tokar, Brazil’s Odebrecht to Pay $50 Million to Charities Under Deal With Development Bank, WALL ST. J.
(Sept. 4, 2019), https://www.wsj.com/articles/brazils-odebrecht-to-pay-50-million-to-charities-under-deal-with-development-
bank-11567637937. 149 See Nelson Renteria, El Salvador Launches Anti-Corruption Commission, Inspired by Guatemala, REUTERS (Sept. 6, 2019),
https://www.reuters.com/article/us-el-salvador-corruption/el-salvador-launches-anti-corruption-commission-inspired-by-
guatemala-idUSKCN1VR2QP. 150 See Sofia Menchu & Diego Oré, Judges Sweat Over Guatemala Anti-Graft Fight After U.N. Commission’s Ouster, REUTERS
(Aug. 30, 2019), https://www.reuters.com/article/us-guatemala-corruption/judges-sweat-over-guatemala-anti-graft-fight-
after-u-n-commissions-ouster-idUSKCN1VK2ED?feedType=. 151 See Sandra Cuffe, Guatemala Court Halts Inquiry of UN-Backed Anti-Corruption Body, AL JAZEERA (Oct. 7, 2019),
https://www.aljazeera.com/news/2019/10/guatemala-court-halts-inqury-backed-anti-corruption-body-
191007234928704.html.
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In Peru, authorities arrested former President Pedro Pablo Kuczynski for allegedly helping Odebrecht win
contracts in exchange for bribes disguised as consulting fees, while he was a cabinet minister.152 Former
President Alan Garcia committed suicide, purportedly to avoid arrest in connection with a different
Odebrecht investigation involving charges of money laundering, influence peddling, and collusion.153
Former President Alejandro Toledo was arrested in the United States and faces extradition to Peru for
allegedly receiving $20 million from Odebrecht in exchange for helping the company to secure public works
contracts in Peru.154
North America
In Canada, SNC-Lavalin Construction, a division of SNC-Lavalin—which was at the center of a political
scandal following reports that Prime Minister Justin Trudeau and his aides pressured then-Attorney
General Jody Wilson-Raybould to settle the case against SNC-Lavalin—pleaded guilty to fraud as part of a
deal in which all charges against SNC-Lavalin were withdrawn.155 SNC-Lavalin will pay a $211 million fine
over five years, engage an independent monitor, and be subject to three years of probation. In addition,
Sami Bebawi, a former executive at SNC-Lavalin, was found guilty of corruption-related charges following
a six-week jury trial in Montreal.156
In Mexico, Emilio Lozoya Austin, the former head of Pemex, was indicted by Mexican authorities for
bribery, tax fraud, and conducting operations using money from illegal sources.157 Arrest warrants were
issued for Lozoya Austin, along with his family members.158 Eduardo Medina Mora, a justice of the Mexican
152 See Mitra Taj & Guadalupe Pardo, Peruvian Judge Orders Arrest of Ex-President Kuczynski in Bribery Probe, REUTERS
(Apr. 10, 2019), https://www.reuters.com/article/us-peru-corruption/peruvian-judge-orders-arrest-of-ex-president-
kuczynski-in-bribery-probe-idUSKCN1RM1SA; Marco Aquino, Peru Ex-President Kuczynski Ordered Into Pre-Trial House
Arrest, REUTERS (Apr. 28, 2019), https://www.reuters.com/article/us-peru-corruption/peru-ex-president-kuczynski-ordered-
into-pre-trial-house-arrest-idUSKCN1S40BG. 153 See Andrea Zarate & Nicholas Casey, Alan Garcia, Ex-President of Peru, Is Dead After Shooting Himself During Arrest, N.Y.
TIMES (Apr. 17, 2019), https://www.nytimes.com/2019/04/17/world/americas/alan-garcia-dead.html. 154 See Marco Aquino & Maria Cervantes, Peru’s ‘Fugitive’ Ex-President Toledo Arrested in U.S., Faces Extradition, REUTERS
(July 16, 2019), https://www.reuters.com/article/us-peru-extradition-usa/perus-fugitive-ex-president-toledo-arrested-in-u-s-
faces-extradition-idUSKCN1UB2EL. 155 See Allison Lampert & Kelsey Johnson, Update 3 – Canada’s SNC-Lavalin Settles Libya Bribery Case That Shook Trudeau
Government, REUTERS (Dec. 18, 2019), https://www.reuters.com/article/snc-lavalin-court/update-3-canadas-snc-lavalin-
settles-libya-bribery-case-that-shook-trudeau-government-idUSL1N28S18S?feedType=RSS&feedName=companyNews. 156 See Kim Mackrael, Canadian Jury Finds Former SNC-Lavalin Executive Guilty on Fraud, Corruption Charges, WALL ST. J.
(Dec. 15, 2019), https://www.wsj.com/articles/canadian-jury-finds-former-snc-lavalin-executive-guilty-on-fraud-corruption-
charges-11576428130. 157 See Kirk Semple & Azam Ahmed, Mexico Charges Former Oil Official With Bribery in Anticorruption Drive, N.Y. Times
(May 28, 2019), https://www.nytimes.com/2019/05/28/world/americas/mexico-corruption-prosecution-oil-company.html;
Robbie Whelan, Secret Recordings Describe Extensive Bribery at Mexico’s Pemex, WALL ST. J. (Oct. 11, 2019),
https://www.wsj.com/articles/secret-recordings-describe-extensive-bribery-at-mexicos-pemex-11570804717. 158 See Rebekah F. Ward & Anthony Esposito, Mexico Issues Arrest Warrants for Ex-Pemex CEO Lozoya, Family Members,
REUTERS (July 5, 2019), https://www.reuters.com/article/us-mexico-pemex/mexico-issues-arrest-warrants-for-ex-pemex-ceo-
lozoya-family-members-idUSKCN1U01N0.
40
Supreme Court, resigned following questions from Mexico’s financial intelligence unit concerning potential
allegations of corruption.159
Oceania
In Australia, the attorney general announced that the government will present a bill to the Australian
Parliament aimed at preventing and investigating foreign bribery.160 Under the bill, corporations that fail
to prevent foreign bribery will face the greatest of three penalties: fines up to $14 million, 10 percent of the
company’s annual turnover, or three times the profit from the corrupt deal. The bill also broadens
Australia’s definition of “foreign official” to include politicians running for office in their home country.
Multilateral Development Bank Sanctions
In 2019, as in prior years, the World Bank Group debarred or otherwise sanctioned significantly more
individuals and entities than the other multilateral development banks (“MDBs”). The World Bank Group
imposed 1,011 debarments, whereas the Inter-American Development Bank imposed 45, the Asian
Development Bank imposed 15, the African Development Bank imposed eight, and the European Bank for
Reconstruction and Development imposed one.161 Twenty-six of the debarments imposed by the World
Bank, twenty of the debarments imposed by the Inter-American Development Bank, three of the
debarments imposed by the African Development Bank, and the sole debarment imposed by the European
Bank for Reconstruction and Development were based, at least in part, on corrupt practices. The Asian
Development Bank does not appear to have imposed any debarments based on corrupt practices. The
number of MDBs imposing debarments based on corrupt practices is a marked increase from recent years,
during which many of the MDBs did not impose any such debarments.
159 See Daina Beth Solomon & Miguel Angel Gutierrez, Mexican Supreme Court Justice Resigns Amid Corruption Questions,
Reuters (Oct. 3, 2019), https://www.reuters.com/article/us-mexico-politics/mexican-supreme-court-justice-resigns-amid-
corruption-questions-idUSKBN1WJ08K. 160 See Olivia Caisley, Companies in the Sights of Foreign Bribery Crackdown (Nov. 28, 2019),
https://www.theaustralian.com.au/nation/politics/companies-in-the-sights-of-foreign-bribery-crackdown/news-
story/8724379e7cb7c869b637f7e2f2241b91. 161 Debarments were counted based on the data reported by each MDB, using each bank’s own reporting criteria. See Debarment
and Sanctions Procedures, AFRICAN DEV. BANK GRP., https://www.afdb.org/en/projects-and-operations/procurement/
debarment-and-sanctions-procedures/; Published List, ASIAN DEV. BANK, http://lnadbg4.adb.org/oga0009p.nsf/
sancALLPublic?OpenView&count=999; Ineligible Entities, EUROPEAN BANK FOR RECONSTRUCTR. AND DEV.,
http://www.ebrd.com/ineligible-entities.html (including debarments based upon third-party findings); Sanctioned Firms and
Individuals, INTER-AMERICAN DEV. BANK, http://www.iadb.org/en/topics/transparency/integrity-at-the-idb-
group/sanctioned-firms-and-individuals,1293.html;World Bank Listing of Ineligible Firms & Individuals, WORLD BANK,
http://web.worldbank.org/external/default/main?theSitePK=84266&contentMDK=64069844&menuPK=116730&pagePK=64
148989&piPK=64148984. The World Bank Group appears to report only current debarments; the debarment totals are based
upon the data reported as of January 11, 2020. The African Development Bank does not specify the grounds for its
debarments; those grounds were counted based upon information reported by the Asian Development Bank and African
Development Bank press releases.
41
Unfortunately, limited conclusions about MDB corruption enforcement can be drawn from this data.
Debarments of affiliates of the same company generally are reported as separate debarments, such that
debarment statistics do not reflect the number of distinct investigations that have resulted in debarments.
Looking Forward Into 2020
As we predicted last year, U.S. authorities have continued to focus on themes such as individual
accountability, providing companies with incentives for self-disclosure and cooperation, corporate
compliance, transparency, multi-jurisdictional coordination, and international cooperation. Statements by
senior Trump administration officials, policies implemented by U.S. authorities, and recent corporate and
individual enforcement trends reflect these ongoing themes. Notably, the DOJ’s anti-corruption priorities
appear unchanged following the confirmation of Attorney General Barr. There is little concrete evidence
that the DOJ’s China Initiative has had an impact on FCPA enforcement, though, given the passage of time,
2020 may bring some developments in this regard.
Looking ahead, 2020 promises to be an interesting year for FCPA enforcement. In early 2020, White House
economic advisor Larry Kudlow stated that the Trump administration is “looking at” making changes to the
FCPA.162 Although Kudlow declined to provide details beyond saying that the administration has heard
complaints from companies and is working on a “package” of reforms, President Trump previously has
expressed hostility toward the statute. In 2012, prior to becoming president, he referred to the FCPA as a
“horrible law [that] should be changed” and said that “the world is laughing” at the United States for
enforcing it.163 And reportedly, in 2017, he described the FCPA as “unfair” to American companies and told
then-Secretary of State Rex Tillerson and senior policy adviser Stephen Miller that he wanted to repeal the
statute.164 Of course, any amendments to the FCPA would require congressional action, which may be
challenging in an election year, particularly given the current political landscape.
Short of legislative action, the President does have the authority to issue executive orders and take other
actions that could affect how the FCPA is enforced and the level of government resources committed to the
effort. We will monitor for such developments and report on them should they occur.
In addition, with two individuals scheduled for trial in 2020, and likely more to be scheduled in the coming
years, we expect that judges will have an increased role in how the FCPA is enforced.
162 See Christina Wilkie, Trump Economic Advisor Larry Kudlow Says White House is ‘Looking At’ Changes to Global Anti-
Bribery Law, CNBC (Jan. 17, 2020), https://www.cnbc.com/2020/01/17/kudlow-white-house-is-looking-at-reforms-to-
global-anti-bribery-law.html. 163 Jim Zarroli, Trump Used to Disparage an Anti-Bribery Law; Will He Enforce It Now?, NPR (Nov. 8, 2017),
https://www.npr.org/2017/11/08/561059555/trump-used-to-disparage-an-anti-bribery-law-will-he-enforce-it-now; Jeanna
Smialek, Trump Tried to Kill Anti-Bribery Rule He Deemed ‘Unfair,’ New Book Alleges, N.Y. TIMES (Jan. 15, 2020),
https://www.nytimes.com/2020/01/15/business/economy/trump-bribery-law.html. 164 See Jeanna Smialek, Trump Tried to Kill Anti-Bribery Rule He Deemed ‘Unfair,’ New Book Alleges, N.Y. TIMES (Jan. 15, 2020),
https://www.nytimes.com/2020/01/15/business/economy/trump-bribery-law.html.
42
Finally, looking abroad, although the DOJ and the SEC recovered a record-breaking combined $2.6 billion
in corporate resolutions, the nearly $215 million assessed by foreign authorities in those cases continues a
downward trend from the record $3.7 billion assessed by foreign authorities in 2016. Although too soon to
draw firm conclusions, this decline may indicate a decrease in the willingness of foreign authorities to
cooperate with U.S. authorities. While U.S. authorities received cooperation from the governments of over
twenty nations in U.S. corporate enforcement resolutions in 2019, these investigations had been ongoing
for several years, dating as far back as 2011. Given the significant shifts in international relations and global
economic competition in the past year, it remains to be seen whether such international cooperation
continues. Going forward, it may be that foreign authorities are more willing to pursue their own
prosecutions than to continue cooperating with U.S. authorities.
Countries across the globe have continued to develop their domestic anti-corruption laws, and new
corruption scandals and prosecutions blossom with regularity. We expect that trend to continue next year.
We look forward to providing you with further updates on these and other developments in 2020.
* * *
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This memorandum is not intended to provide legal advice, and no legal or business decision should be based
on its content. Questions concerning issues addressed in this memorandum should be directed to:
Jessica S. Carey
+ 1-212-373-3566
Roberto Finzi
+1-212-373-3311
Harris Fischman
+1-212-373-3306
Christopher D. Frey
+81-3-3597-6309
Michael E. Gertzman
+1-212-373-3281
Roberto J. Gonzalez
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Michele Hirshman
+1-212-373-3747
Brad S. Karp
+1-212-373-3316
Loretta E. Lynch
+1-212-373-3000
Mark F. Mendelsohn
+1-202-223-7377
Alex Young K. Oh
+1-202-223-7334
Lorin L. Reisner
+1-212-373-3250
Jeannie S. Rhee
+1-202-223-7466
Theodore V. Wells Jr.
+1-212-373-3089
Kaye N. Yoshino
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Associates Meredith A. Arfa, Jonathan Silberstein-Loeb, and Juan J. Gascon and Law Clerk Jacob A.
Braly contributed to this Client Memorandum.